AMP Limited has confirmed that it made false or misleading statements to the Australian Securities and Investments Commission (ASIC) relating to fee for no service issues around orphan clients.
The admission was made to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry along with confirmation that AMP Limited actually maintained a policy which saw fees continuing to extracted from orphan clients under buyer of last resort arrangements (BOLR) for up to three months.
Appearing before the Royal Commission, AMP’s group executive, Advice and New Zealand, Jack Regan confirmed the six instances of AMP making false and misleading statements to the regulator with respect to fee for no service.
A further four instances of false or misleading statements being made to ASIC were then also cited to the Royal Commission.
The Royal Commission also heard that the situation with respect to fee for no service had dated back to 2010 when the company had received legal advice as to the status of the arrangements.
Senior counsel assisting the Royal Commission, Michael Hodge referred to AMP company policy of leaving fees switched on for orphan clients for up to three months and stated that the situation was “not a failure of process but a deliberate decision of AMP”.
Hodge then sought to determine how high up the AMP management structure knowledge of the arrangement would have been known, suggesting that documentation suggested it would have been known by then AMP executive director, Advice, Michael Guggenheimer and Regan acknowledging that it was likely his predecessor Rob Caprioli would have known.