ASIC takes AMP Financial Planning to court
The Australian Securities and Investments Commission (ASIC) has commenced proceedings against AMP Financial Planning (AMPFP) in the Federal Court, alleging that it failed to ensure its planners complied with the best interests duty and related obligations under the Corporations Act.
ASIC alleged that some AMPFP planners engaged in ‘rewriting conduct’, meaning that they provided advice that resulted in the cancellation of the client’s existing insurance cover and the taking out of similar replacement policies by way of a new application rather than transfer.
By advising clients to make new applications, the planners stood to receive higher commissions. They also exposed clients unnecessarily to underwriting and associated risks by recommending this rather than a transfer.
ASIC alleged that such advice was inappropriate and failed to be in the clients’ best interests.
It contended that by 1 July, 2013, AMPFP knew or ought to have known that this behaviour was occurring, yet failed to take action on it in the period from then until 30 June, 2015.
AUTHOR
Hannah Wootton
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
