Would an adviser leave a client in a negative cash option?
How could any member of an AMP superannuation fund be left 100 per cent invested in cash and make no or negative returns if they were receiving advice from a financial planner?
That was the question posed by counsel assisting the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Michael Hodge, QC has he continued to probe the how the trustee of the AMP Superannuation fund had handled the matter.
Noting that an adviser service fee had been charged to at least one affected client, Hodge asked the Director, Regulatory Governance of the AMP and NM Super Funds, Rachel Sansom whether it was a matter of concern to the fund trustee that any member could be left invested in 100 per cent cash exposures when they were making no or negative returns.
Sansom said it depended on the intentions of the superannuation fund member, Hodge asked whether it was possible that a fund member could be left exposed for three years.
Sansom also confirmed to the Royal Commission that member remediation equating to a combined total of nearly $30 million from incidents involving mistakes involved in the fees extracted by AMP Capital.
Sansom was asked by the Commissioner, Kenneth Hayne, whether she believed the trustee was in an obligation to fulfil its obligations to members and when she said she believed it could, Hayne queried whether this could be achieved via a staff of just 15.
Sansom it could be achieved via the trustee’s outsource arrangements, to which the commissioner responded that the elements within AMP to which the tasks were outsourced were wholly in control of the information flow.
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