Law firm Maurice Blackburn has described Macquarie Bank’s financial advice remediation scheme as “flawed”, and warns clients may not be adequately compensated.

John Berrill, head of the firm’s financial disputes department, says Macquarie’s announcement that it will start writing to clients raises a number of questions, given the bank is in charge of the process.

“This goes back a decade and involves 160,000 clients,” he said. “There is no detail about how information is to be exchanged, whether clients will be provided with copies of all the documents on their files and what systems are in place to communicate with clients whose contact details have changed.”

Last Friday the Australian Securities and Investments Commission (ASIC) announced the remediation process has started as part of an enforceable undertaking issued last year.

It requires Macquarie to identify advisers whose poor compliance led to bad advice to clients.

ASIC has appointed KPMG to ensure the enforceable undertaking is completed.

Mr Berrill is critical of the scheme because it does not allow legal representation until after the client review.

“Random audits and independent oversight are another layer of quality control, but the value of this oversight will depend on its rigour,” he said. “This won’t mean all decisions of Macquarie will be reviewed. Clearly they won’t.

“There is no time limit on how long the review process will take, either.”

He has called on Macquarie to create “a more robust compensation scheme”, similar to the one Commonwealth Bank has set up for its financial planning businesses. He says 20 Macquarie customers have contacted Maurice Blackburn regarding poor financial advice.