It will be almost another two years before AMP completes its fee for no service review of both current and former advisers, but the firm has acknowledged that it has not yet developed a methodology for dealing with those advisers who have departed the company.
This situation was laid bare by an Australian Securities and Investments Commission (ASIC) update on how AMP and the major banks have been handling fee for no service remediation, with the company having informed the regulator that it estimates it won’t be completing its review of customer remediation until the second half of 2021.
The doubt about how AMP would handle remediation in the context of departed advisers also came at it seeks to deal with buyer of last resort issues for those advisers headed for the exit.
The time-frames confronting AMP were revealed alongside a clear message from ASIC to the Commonwealth Bank, the National Australia Bank (NAB) and Westpac that they should not seek to adopt a “legalistic” approach to enable them to absolve themselves of refunding fees where advice was not provided but annual reviews were offered.
ASIC made clear that the mere offer of an annual review, even if it was subsequently declined by the client, was not sufficient excuse to charge a fee.
In doing so it pointed to Count Financial, Financial Wisdom and the Pathways division of Commonwealth Financial Planning Limited of having previously adopted this sort of “legalistic” approach while in the case of NAB licensees it mentioned Apogee Financial Planning, Godfrey Pembroke, GWM Adviser Services, Meritum Financial Group and NAB Financial Planning as “having agreed with ASIC’s position”.
It said that Westpac had agreed to ASIC’s position but that its licensees Magnitude and Securitor had not yet provided a methodology proposal.
The ASIC assessment said that AMP had not yet proposed a methodology for dealing with advisers who had departed the company.
“For its review of current advisers, where agreements stipulated the offer of a review and customers declined three or more consecutive offers, AMP will refund the fees for all three periods,” the ASIC assessment said. “AMP has not yet proposed a methodology for advisers who have departed.”
The regulator said that for its review of current advisers, AMP was proposing to apportion value to services other than the annual review but noted that this was something which “ASIC is currently considering “.
“AMP has not yet proposed a methodology for advisers who have departed,” it said.