Asgard ‘engaged’ by ASIC on Auto Rebalance failure remediation

Mike Taylor

Managing Editor and Publisher

23 November 2022

The Westpac-owned Asgard platform has written to financial advice businesses telling them that it has been engaged by the Australian Securities and Investments Commission (ASIC) to determine whether they were impacted by a prolonged Auto Rebalance Facility failure.

Asgard has told the businesses that it has been contacted by another Australian financial services licensee that uses the Auto Rebalance Facility to provide instructions for their clients and is proposing to remediate those clients who suffered detriment as a result of the failure.

Asgard has told licensees it has identified advisers who provided financial services under their licenses and were listed as the adviser for client accounts during the rebalance failure.

The Asgard communication states: “…we have been contacted by another Australian financial services licensee who is remediating their impacted clients where they identified their advisers were notified that rebalancing of the clients’ portfolio using the Auto Rebalance Facility was not able to proceed in the period between September 2004 and September 2019”.

“As a result, ASIC has engaged Asgard to understand if other licensees and advisers had clients who were affected by an inability to rebalance their portfolios using the Auto Rebalance Facility,” it said.

“We’ve identified advisers who provided financial services under your Australian Financial Services License (AFSL) and were listed as the adviser for client accounts in relation to which a rebalance did not complete during the period in question. We are bringing this to your attention so that you may investigate this further,” the Asgard communication said.

“Please consider the information above as it relates to advisers connected with your license and consider whether your representatives have met their obligations to clients in connection with the Auto Rebalance Facility. Depending on the steps your adviser representatives took when notified during the relevant period that a rebalance using the Auto Rebalancing Facility would not proceed, you should also consider:

• If the advice strategies relevant to these customers and the Auto Rebalance Facility were appropriately actioned; and
• Whether your clients have incurred any loss that you should consider remediating.