There were regulatory concerns in 2017 that the trustee of AMP Super did not have any knowledge of which AMP advisers were directing their clients to invest in AMP Super and whether that advice was appropriate.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was told that the concerns were held by the Australian Prudential Regulation Authority (APRA) which wrote to the trustee in April, last year.
That letter stated that APRA had observed that AMP Super was reliant on AMP Advice and AMP Life to monitor adviser activities and to manage the associated risks of distribution of superannuation products.
It went on to state: “AMP Super does not have visibility of the advisers who direct members to invest in their superannuation products or if the strategies for members are appropriate”.
Receipt of the APRA letter was confirmed by director, regulatory governance for AMP/NM Super, Rachel Sansom who said changes were now being implemented to address the situation.
“We’re getting increased visibility, but one of the things we’re looking to take into account is the different perspectives from if you have a financial adviser they’re looking at your whole financial situation one on one, if you like, while for the superannuation trustees, what we’re looking at is cohorts of members in aggregate,” Sansom said. “So, there will always be a limit to which the superannuation trustee perspective can actually add value but we’re certainly increasing our interest in the advice component.”
The Royal Commission also heard that the AMP Super trustee had been unaware of the fee for no service arrangements impacting members of the superannuation until they were raised during earlier hearings of the Royal Commission.