An investigation by the Australian financial services regulator found that clients of Citigroup in Australia wrongly believed they were being given personal advice when they agreed to invest in structured products.
The Australian Securities and Investments Commission (Asic) was concerned that advisers were venturing beyond the boundaries of general advice, giving clients the wrong impression about how suitable the investments were.
Advisers asked customers about their personal circumstances, such as their risk tolerance, and also highlighted benefits and risks to customers who had no previous experience of investing in structured products.
Under Australian regulations, financial advisers have higher obligations and disclosure requirement when providing personal advice.
As a result, Citigroup will refund over A$3m (£1.6m, $2.15m, €1.9m) to 114 customers for losses arising out of structured products they invested in between 2013 and 2017.
It will also write to over 1,000 customers who are still in the products and offer them an opportunity to exit without cost.
From 1 January 2018, Citigroup ceased selling structured products to retail clients under a general advice model.
