ASIC takes AMP Financial Planning to court
The Australian Securities and Investments Commission (ASIC) has commenced proceedings against AMP Financial Planning (AMPFP) in the Federal Court, alleging that it failed to ensure its planners complied with the best interests duty and related obligations under the Corporations Act.
ASIC alleged that some AMPFP planners engaged in ‘rewriting conduct’, meaning that they provided advice that resulted in the cancellation of the client’s existing insurance cover and the taking out of similar replacement policies by way of a new application rather than transfer.
By advising clients to make new applications, the planners stood to receive higher commissions. They also exposed clients unnecessarily to underwriting and associated risks by recommending this rather than a transfer.
ASIC alleged that such advice was inappropriate and failed to be in the clients’ best interests.
It contended that by 1 July, 2013, AMPFP knew or ought to have known that this behaviour was occurring, yet failed to take action on it in the period from then until 30 June, 2015.
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