Verdict in for AMP BOLR class action settlement
The $100 million settlement for members of the AMP buyer of last resort (BOLR) class action has been approved today.
In orders published on 6 September, the settlement was approved subject to three adjustments. These are the funders’ litigation costs be disallowed, the funders’ administration cost be disallowed, and an adjustment to be made regarding claims for future legal costs.
The status of the case, which was first filed in July 2020, is now closed.
Last week, members of the AMP buyer of last resort class action appeared in Federal Court in Melbourne to state their objections to the settlement. In a two-day hearing, many members indicated that they would be open to appealing the verdict in the hope of receiving a larger sum.
AMP announced last November that the settlement offer was $100 million, double what the firm had made a provision for in its H1 2023 financial statement. It had previously stated it believed $50 million reflected a current assessment of the potential liabilities related to the advice practices that were the subject of the judgment.
The initial verdict in the case had been handed down by Justice Moshinsky last July.
Last month, AMP announced Entireti, which was formed as a parent company of Fortnum Private Wealth and Personal Financial Services (PFS), would acquire AMP’s advice licensees and Jigsaw, and AMP would retain a 30 per cent stake.
This was for $10.2 million, 70 per cent in cash and 30 per cent being AMP’s equity stake, which would hold AMP’s three licensees and Jigsaw.
Secondly, AZ NGA will acquire minority stakes held by AMP in 16 practices for $82.2 million. The initial focus of the partnership will be on a seamless transition that maintains the current service proposition for AMP advisers, supported by the continuity of AMP management and their adviser community.
AZ NGA chief executive Paul Barrett has told Money Management that he plans to “seize the day” by assisting each of the 16 businesses to achieve their growth ambitions in a way that AMP was unable to support.
“Ultimately, these 16 firms in the portfolio have all the same problems and ambitions that our core firms in the AZ NGA portfolio have. We are very accustomed to working with them and solving those problems around succession and growth,” he said.
AUTHOR
Laura Dew
Recommended for you
As the industry navigates the fallout from recent product failures, two major AFSLs have detailed their APL selection process and relationship with research houses, warning a selection error could “destroy” a licensee.
The impending retirement of financial advisers in their 50s could see the profession face significant succession challenges over the coming decade and younger advisers may not be the answer.
With a third of AFSLs being solo advisers, how can they navigate key person risk and ensure they are still attractive propositions for buyers when it comes to their succession planning?
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
