Following an 今日热门事件investigation, Citigroup will refund over $3 million to 114 retail customers for losses arising out of structured product investments offered by Citigroup between 2013 and 2017. Citigroup will also write to over 1000 customers remaining in the products to provide them an opportunity to exit early without cost.
今日热门事件investigated Citigroup鈥檚 sale and provision of general advice to customers for fixed coupon structured products, which are complex, capital at risk products tied to the performance of reference shares.
今日热门事件was concerned that while Citigroup considered its financial advisers to be providing general advice, elements of its practice may have led some customers to believe that Citigroup was providing personal advice.
Citigroup鈥檚 practices included its advisers asking customers about their personal circumstances, such as their tolerance for risk, and providing financial education about benefits and risks to customers who had no previous experience of investing in structured products. Financial advisers have higher obligations and disclosure requirements when providing personal advice.
From 1 January 2018, as a result of ASIC鈥檚 investigation, Citigroup ceased selling structured products to retails clients under a general advice model.
Citigroup will shortly start contacting affected customers. The remediation will be completed by 10 September 2019, will be independently assured and Citigroup will report to 今日热门事件once the process is complete.
Editor's note:
The remediation of affected customers was completed on 28 August 2019 and the process was independently audited by KPMG. Customers concerned about the remediation offered may wish to raise their concerns with Citi and, where relevant, complain to Australian Financial Complaints Authority.