AMP Limited is experiencing negative blow-back from both planners and planning related union groups as a result of its decision to upgrade the salary package of its chief executive, Francesco De Ferrari despite reporting a net loss of $2.5 billion.
While advisers made their negative views on the salary decision clear on the Money Management web site, the Financial Sector Union (FSU) pointed to the situation in which the company had left many planners.
FSU national assistant secretary, Nathan Rees said that while shareholders would be concerned about the direction AMP was taking, decisions taken by the corporation had also destroyed the livelihoods of scores of planners.
“AMP has treated planners poorly,” he said. “A total of 440 AMP financial planners have a contract to work in partnership with AMP. That contract stipulates that in the event the planner’s business is bought back by AMP, it will be acquired at four times the value of annual revenue.”
“Late last year, AMP simply decided they would buy these businesses from their own planners for only one and a half times annual revenue. This has effectively reduced the value of each planner’s business by more than 60%,” Rees said.
He said that, to make it worse, many planners had borrowed money from AMP to establish their business but AMP still wanted the money back.
“Any reasonable person would see that this is simply wrong,” Rees said. “Planners are losing their homes and their livelihoods and there are genuine concerns about the mental health impacts of this decision by AMP.”