AMP is to appeal the verdict of its Buyer of Last Resort class action.
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.
In July 2023, Justice Mark Moshinsky ruled in favour of the class action group, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
He ordered that AMP pay Equity Financial Planners, the lead applicant in the Corrs Chambers Westgarth-led class action, $814,944.76 and over $151,000 in interest.
Sample group member, Wealthstone, would receive $151,533.51 and just over $17,000 in interest. Wealthstone’s contract in AMP’s BOLR scheme has also been voided by the Federal Court.
AMP was given 28 days to pay the respondents.
In a statement to the ASX this morning (27 September), the firm provided an update on the judgement.
“As announced on 5 July 2023, the Court found in favour of the claims of the lead applicant and sample group member.
“AMPFP confirms that it has filed a Notice of Appeal in relation to the judgement.
“The parties have also agreed to engage in mediation, which will take place in November 2023.”
Matt Lawler, AMP Group executive, advice, said: “While we believe we have grounds on which to appeal, we also recognise the ongoing impact the proceedings are having on practices, with whom we’ve worked hard to rebuild strong and trusted relationships.
“We value these relationships and that’s why we are fully committed to the upcoming mediation process in November 2023, with the aim of reaching agreement on an outcome that allows us to put this behind us.”
AMP announced in its full-year results that it has set aside $50 million in provisions for the case, but many felt this was too low and the actual number should be at least double that figure.
The biggest shareholder class action settlement so far was for $200 million paid by Centro property group in 2012. The case centred around allegations of misleading and deceptive conduct that the firm had misled shareholders by failing to disclose billions of dollars in debt that was about to expire.
Speaking at the time, AMP chief executive Alexis George said the $50 million sum was AMP’s “best estimate of the judgment”.
She had not ruled out AMP appealing the case.
Well, again proof that AMP is far from being an ethical corporate citizen. No regard for the damage caused, no ownership for past mistakes and again, no action to make things right.
My guess is they know the $50m is well under their full exposure and they will use mediation to try and reduce the true cost as much as possible.
AMP believe they have grounds to appeal, they also thought they had grounds to make the changes they did but that was proven incorrect in court.
AMP are still immoral and corrupt to the core.
AMP has learned nothing, they had the chance to gain back some honour and they just blew it. Let’s see if they take a different approach to mediation than they have previously where it was my way or the highway.
What about the impact on those planners families where they lost a loved one due to the impact of the decisions AMP made and decimated the financial future of many.
Surprised, No, hoped for better, yes.
How to destroy a brand – refer AMP.