AMP has been urged to commit to mediation by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, as it moves to exit up to 250 financial planning businesses.
Carnell said over 80 AMP planners had told her office that they faced financial ruin as a result of AMP’s new exit terms.
Last year, AMP announced its buyback strategy had would see the exit of a significant number of aligned advisers and significantly reduced pay-outs from buy of last resort (BOLR) arrangements.
“Many of those planners who borrowed from AMP to buy into the business at a set price, now face losing their homes and their livelihoods, as the financial institution seeks to impose a three-year restriction on working as a financial planner,” she said.
“My office has met with AMP and although they signalled they were open to mediation, they have yet to confirm their participation.
“It’s critical these small business owners have clear information about their financial position before making any big decisions about their future. Mediation would be one way of providing that much-needed clarity.”
Carnell said the ombudsman had called on AMP to waive debts for those planners who faced AMP-imposed reduced buyback values.
“Small businesses in the financial planning industry have faced a great deal of turmoil in the aftermath of the Banking Royal Commission, with hundreds of planners bearing the brunt of brutal restructures and fire sales by banks and wealth funds,” she said.
“We remain concerned about a number of behaviours that may include the conduct of lookback audits, financial planning licensors shifting responsibility for client compensation payments to licenees, short notice periods provided to licencees exiting the business and restraint of trade provisions.”