AMP BOLR class action verdict delivered
The Federal Court has issued its verdict in the class action case against AMP Financial Planning (AMPFP).
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.
Justice Mark Moshinsky ruled in favour of the class action group on Wednesday morning, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
Lead applicant Equity Financial Planners is entitled to damages in the sum of $813,560, while sample group member Wealthstone is entitled to damages in the sum of $115,533.51. There will be a further process to determine the impact on other group members.
In a statement to the ASX, AMP said: "The Court has today ruled in favour of the claims of the lead applicant and the sample group member.
"The Court accepted evidence of the loss incurred by the two group members, being the lead applicant (Equity Financial Planners -$813,560) and the sample group member (Wealthstone - $115,533). The Court determined amounts payable to the lead applicant and the sample group member only.
"Subject to any appeal, a process will be required to determine the impact of the decision on the other group members.
"Noting the complexity of the matter, AMP is reviewing the judgement in detail to determine the full effect of the judgement and its next steps. AMP will provide an update in due course."
Neil Macdonald, chief executive of The Advisers Association, who was a witness in the case, said: "‘We are pleased for our AMP members and may make further comment when we have had time to read Justice Moshinsky's judgement in detail."
Shares in AMP fell 6.1 per cent after the verdict was released.
Last year, Money Management spoke with a former AMPFP adviser who said the change to the BOLR policy had left him fearing bankruptcy and that his home could be taken from him.
“I had a $600k business and it went to zero and left me with debt,” he said.
“I understand that change occurs but you can’t fundamentally change a relationship at a moment’s notice and pass the costs on. That’s unreasonable behaviour.
“I wanted to sell my book at 65 and retire and be financially sorted, that’s gone now. AMP has stolen from my retirement.”
The class action was commenced by Corrs Chambers Westgarth.