ASIC sues AMP firms for fees-for-no-service

The corporate regulator has taken six companies that are, or were, part of AMP Limited to the Federal Court after charging $600,000 in fees-for-no-service on corporate superannuation accounts.

The Australian Securities and Investments Commission (ASIC) alleged that the companies charged advice fees to over 1,500 customers despite knowing the customers were no longer able to access the relevant advice.

ASIC said it sought declarations, pecuniary penalties and adverse publicity orders to be made by the Federal Court.

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ASIC further alleged that from July, 2015, to April, 2019, the AMP companies:

  • Deducted financial advice fees from 1,540 customers’ superannuation accounts despite being aware that the customer had left their employer-sponsored superannuation account and therefore could not access the advice for which those fees were paid;
  • Failed to ensure that a system was in place that did not charge customers who had left their employer-sponsored account; and
  • Contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly.

The six AMP companies were:

  • AMP Superannuation Limited;
  • AMP Life Limited, which is now owned by Resolution Life NZ, but was part of AMP when the conduct occurred;
  • AMP Financial Planning Proprietary Limited;
  • AMP Services Limited;
  • Charter Financial Planning Limited; and
  • Hillross Financial Services Limited.

ASIC noted this followed proceedings by ASIC against AMP companies that allegedly charged life insurance premiums and advice fees to over 2,000 customers despite being notified of their death.

In an announcement to the Australian Securities Exchange (ASX), AMP said it acknowledged the civil proceedings by ASIC concerning the “historic charging of Plan Service Fees”.

“In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a Plan Service Fee after delinking from their corporate super plan into a retail account. Amp took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process,” it said.

“The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fees charged and lost earnings.”

 




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Dear Mr ASIC,

Can you explain the difference between this and 'intrafund' advice fees for no service and the inion funds who also charged dead members?

The difference is that Industry Super Funds haven't self-reported the breach, nor have they remediated it. :P

1. AMP deducted advice fees from people they knew were not ever eligible to receive advice.
2. there is no thing as intrafund advice fees. Intrafund advice is advice provided on an existing product, the cost of which may or may not be covered by any administration fee.
3. Administration fees are charged to members of a fund to cover services such as call centre, advice, apps, calculators, general administration of the fund. Members charged an admin fee are offered and eligible to receive any of these services should they wish to do so. Unlike AMP where the members were never eligible.

the fees may or may not comes from Administration fees......seriously! The way intrafund advice fees are charged to everyone in the fund is classic fee for no service.....try asking for your portion of fee back because you didn't use the service for the year.

That's not much of an argument.
ISF charge fees across all accounts knowing full well all Members won't get advice or the same services from them. One fee for all, different benefits for each.
ISF run Call Centres and Financial Planning teams with their fees (as well as sponsor all types of things not related to Members retirement incomes).
Where members not getting advice pay the same fees as those that do, the unadvised subsidise the advised. That's inequitable and fees for no service.

So when are they going to sue Hostplus, Aus Super and the rest for charging every member for intra fund advice that only a few members take advantage of? Surely the $2.50 per week is the greatest rort in the entire superannuation landscape!

So the clients have already been remediated and ASIC still is taking action. I thought the precedent was set when Shipton got to pay back the money he stole and got no penalty. Based on this new approach I wait to hear about ASIC suing both Shipton and Crenan.

I think ASIC has two sets of rules.

ASIC simply trying to eliminate all competition of Industry Super - yet again?
Seems ASIC works hard at what they do.

and it's funny that advisers are funding this work lol

TBH - the heading mentions "AMP Firms" which made me read the article because I feel sorry for the end adviser. In reality these are just subsidiary companies of AMP which I don't really care for.

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