A number of lawyers have confirmed dealing with AMP financial planners over the operation of AMP Limited’s buyer of last resort (BOLR) arrangements, amid allegations that it has virtually “weaponised” its compliance approach to reduce pay-out amounts to particular advisers.
The lawyers have told Money Management that clients have sought assistance in addressing their issues with the BOLR contracts as they seek to exit their arrangements with the company, particularly those advisers who had taken out loans to purchase books of customers.
The lawyers said a number of advisers had found themselves confronted by allegations concerning their compliance records, while others had been asked to enter into strict confidentiality arrangements as part of their exit agreements.
Asked to comment on the issue, AMP said its BOLR offer was “available under certain conditions to AMP financial advisers who wished to retire or leave the industry”.
“We have governance processes in place to ensure that practices who apply for our BOLR offer meet eligibility criteria, which include a good track record of compliance and client service,” it said.
A number of the allegations against AMP Limited have been aired by commenters on the Money Management web site with some suggesting that a large number of advisers “are up to their ears in debt because they borrowed from AMP to buy books of AMP trails from AMP”.
Others have suggested that if the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recommends strong action to outlaw the remaining trailing commissions sitting within the books, then AMP’s problems and those of advisers holding the books will be magnified.
However, senior financial services lawyer and the principal of Argyle Lawyers, Peter Bobbin said that notwithstanding the Royal Commission’s final recommendations it would be no easy task to change the nature of the contracts underpinning the BOLR arrangements.
He said that the making of the law necessary to make BOLR contracts illegal would be tantamount to nationalising something, and that a far more likely approach would be to grandfather current arrangements and make all subsequent arrangements unlawful.