AMP Financial Planners Association (ampfpa) members are stepping up action by contesting buyer of last resort (BOLR) changes announced by AMP and are holding it accountable for severe financial reputation and psychological harm.
The association said it surveyed member practices about AMP’s announcement that it was trying to right some wrongs of the past and 93% of respondents indicated they supported legal action.
Ampfpa chief executive, Neil Macdonald said, “AMP is on the record saying it is trying to right some of the wrongs of the past – it cannot right wrongs by doing the wrong thing by its own people”.
Ampfpa noted that it had arranged legal packs outlining the available options for its members and was seeking additional information from them.
“We are aware that tier one legal firms are prepared to run a class action against AMP and funders are available at very competitive terms,” Macdonald said. “Our members intend to hold AMP accountable for the severe financial, reputational and psychological harm it is inflicting on its own advisers.”
Earlier this week, AMP announced it intended to cull its adviser network and slash the amount it would pay under its BOLR term to existing advisers from four times recurring revenue to a maximum of 2.5 times.
“This action was taken without consultation with ampfpa, without the required 13 months’ notice to advisers, and after AMP assurances that existing BOLR arrangements would not change,” Macdonald said.
Ampfpa said in May 2018 AMP Financial Planning’s then managing director met with AMP practices to reassure them that prevailing BOLR terms would remain the same.
“Based on this assurance, many practices may have made a decision to stay on with AMP last year, rather than exercising their BOLR rights,” he said.
The association noted it would prefer to consult with AMP to arrive at a fair outcome for their members, their members’ clients and AMP. Some members were actively contacting their local Members of Parliament and Small Business Ombudsman offices.
“In the meantime, AMP should pay the agreed BOLR multiples to those who have previously provided their notice,” Macdonald said.
