AMP BOLR class action verdict delivered
The Federal Court has issued its verdict in the class action case against AMP Financial Planning (AMPFP).
The class action was filed with the Federal Court in Melbourne back in 2020 on behalf of advisers who had been authorised by AMPFP. The claim related to changes made by the firm to its Buyer of Last Resort (BOLR) policy in 2019.
This had seen AMPFP cut its BOLR terms without notice from 4x recurring revenue to a maximum of 2.5x.
Justice Mark Moshinsky ruled in favour of the class action group on Wednesday morning, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
Lead applicant Equity Financial Planners is entitled to damages in the sum of $813,560, while sample group member Wealthstone is entitled to damages in the sum of $115,533.51. There will be a further process to determine the impact on other group members.
In a statement to the ASX, AMP said: "The Court has today ruled in favour of the claims of the lead applicant and the sample group member.
"The Court accepted evidence of the loss incurred by the two group members, being the lead applicant (Equity Financial Planners -$813,560) and the sample group member (Wealthstone - $115,533). The Court determined amounts payable to the lead applicant and the sample group member only.
"Subject to any appeal, a process will be required to determine the impact of the decision on the other group members.
"Noting the complexity of the matter, AMP is reviewing the judgement in detail to determine the full effect of the judgement and its next steps. AMP will provide an update in due course."
Neil Macdonald, chief executive of The Advisers Association, who was a witness in the case, said: "‘We are pleased for our AMP members and may make further comment when we have had time to read Justice Moshinsky's judgement in detail."
Shares in AMP fell 6.1 per cent after the verdict was released.
Last year, Money Management spoke with a former AMPFP adviser who said the change to the BOLR policy had left him fearing bankruptcy and that his home could be taken from him.
“I had a $600k business and it went to zero and left me with debt,” he said.
“I understand that change occurs but you can’t fundamentally change a relationship at a moment’s notice and pass the costs on. That’s unreasonable behaviour.
“I wanted to sell my book at 65 and retire and be financially sorted, that’s gone now. AMP has stolen from my retirement.”
The class action was commenced by Corrs Chambers Westgarth.
AUTHOR
Laura Dew
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AMP are a total disgrace.
After the way they treated planners they should never ever be trusted again.
Why would any planner or adviser ever give business to AMP ever again.
#boycottAMP.
I cried as I listened to the judgement and it became obvious that AMP had lost on ALL COUNTS. Then my old AMP colleagues started calling me one by one, sobbing on the phone! The immoral and unfeeling way this was carried out will have long lasting PTSD effects. Maybe from today we can all start to heal....
What AMP did was absolutely shocking. They got caught out for their unconscionable behaviour to clients, but then behaved worse towards their own advisers who supported them and built the company. Total lack of ethics by AMP management. They should be held accountable. AMP got new management to sort out their client issues and they just continued the same sort of behaviour but this time did the wrong thing by their advisers who had no one to stand up for them.
They need to pay compensation to the families of the poor advisers who committed suicide, became mentally ill etc.
AMP should be drummed out of the industry. Unless they have fundamentally changed their mindset they will fight this to the end of time. AMP will see this as a first hurdle only. Litigious mongrel of on organisation that fortunately I’ve kept well away from.
One wonders if those employees involved in this hideous decision done in the name of AMP can ever be brought to account personally, as they should. Many millions of dollars impacting the bottom lines of their advisers, shareholders and clients as well as in a brand that was once aspirational. Morality seems to be the one thing never assessed in a job interview.
Most of the staff at AMP were good guys Bob, who were themselves bullied and threatened by execs to follow the party line, and left with their own PTSD as a result. It’s their turn for a class action next! Let’s call Akers and Murray back to the stand to answer for the terror they wrought!
Bullying in the workplace is never OK. However, bullying in the workplace is a separate issue to this matter. One of many that AMP must deal with. This matter stands separate for the reason that it was designed to target the very advisers AMP had recruited and placed in debt. Those advisers had been given debt where the size of the debt was determined and in many cases funded by AMP companies. Most internal staff are bit players and not the ones any enquiry should be seeking to hear from. AMP (the brand) is now a stain on the financial landscape when it was once a blue chip firm. Someone in there did this. The board, senior management, internal legal advice. The scale is very different but the style and impact is very much like the robodebt scandal now engulfing some politicians and senior public servants. Where are staff that authored the reports and recommendations which lead to this? The conflict of interest in framing and implementing this program to separate AMP from the advisers they happily screwed over should be highlighted. Having said all this, I will declare that I am not now, nor have I ever been an AMPFP adviser.
Oh yes, the oh so clever know it alls of AMP. Lower than whale shit, so smug at the time. Then torturing advisers with endless audits. They are truly the worst of corporate operatives in Australia and should be put out of business. It is sad that the North platform ( a good platform) is in the hands of these carpet bagging bounders. It should be sold off to another operator and AMP shown the door.
AMP isn't alone here. There are many AFSL holders that make promises to advisers and never deliver them. It's a sad reflection of the profession, despite the ongoing professional development that's been undertaken by advisers themselves. Instead of regulating advisers more, they should focus on improving AFSL holder behaviour. This ruling by the caught should be a wake up call for everyone who runs an AFSL. Treat your advisers as business partners if you want to get anywhere.
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