Members of the AMP buyer of last resort (BOLR) class action have had their day in court as the Federal Court heard its objections to the proposed settlement in a two-day hearing.
AMP announced last November that the settlement offer is for $100 million, double what the firm had made a provision for in its H1 2023 financial statement. It had previously stated it believed $50 million reflected a current assessment of the potential liabilities related to the advice practices that were the subject of the judgment.
A settlement hearing was held in Melbourne on 29–30 August and is understood to have been well-attended by class action participants with proceedings having to be moved to a larger room.
This is the first time many have appeared on the record as during the trial, a lead applicant was appointed to represent the class action members.
There had been around 90 objections made to the proposed settlement prior to the hearing but not all had legal grounds for objections. Around 40 of these are understood to have been heard again in the court during the two days.
Class action participant David Haseldine, who attended the hearing, said: “The objectors were unanimous that the settlement sum is nowhere near enough. The judge was very interested that we would be prepared to risk receiving no settlement to go to an appeal. That was a common question he asked the objectors. We are financial advisers, we understand how risk works, this is not justice for us.
“It was good from the point of view that it was an opportunity for many of us to bring to light how brutal the whole episode has been even for those still at AMPFP.”
He said the $100 million settlement would likely fall down to $50 million after costs to the funder and Corrs Chambers Westgarth, to be divided up between 430 class action participants.
“It’s a laughable sum, we will get very little.”
A spokesperson for AMP said the judgment was reserved after the hearing and that an outcome should be delivered in the next few weeks.
The initial verdict in the case had been handed down by Justice Moshinsky last July.
Last month, AMP announced Entireti, which was formed as a parent company of Fortnum Private Wealth and Professional Financial Services (PFS), will acquire AMP’s advice licensees and Jigsaw, and AMP will retain a 30 per cent stake.
This was for $10.2 million, 70 per cent in cash and 30 per cent being AMP’s equity stake, which will hold AMP’s three licensees and Jigsaw.
Secondly, AZ NGA will acquire minority stakes held by AMP in 16 practices for $82.2 million. The initial focus of the partnership will be on a seamless transition that maintains the current service proposition for AMP advisers, supported by the continuity of AMP management and their adviser community.
AZ NGA chief executive Paul Barrett has told Money Management that he plans to “seize the day” by assisting each of the 16 businesses to achieve their growth ambitions in a way that AMP was unable to support.
“Ultimately, these 16 firms in the portfolio have all the same problems and ambitions that our core firms in the AZ NGA portfolio have. We are very accustomed to working with them and solving those problems around succession and growth,” he said.
