Safety may not lie in numbers for AMP Limited advisers confronted by Buyer of Last Resort (BOLR) issues because their individual issues are often very different, according to lawyer, Dan Mackay.
While the AMP Financial Planning Association (amp-fpa) had opened the way for an adviser class action against AMP, Mackay said AMP advisers were facing individual issues and some of them had stronger legal claims against AMP than others.
“If there was a class action which included all AMP advisers we believe this could be problematic for a number of reasons,” he said.
In a column to be published in the latest edition of Money Management, Mackay said: “In the battle to come, we don’t think individuals are ‘safer’ simply because there are a large number of them heading in one direction. In fact, grouping together and being ‘in the pack’ might prove to be counterproductive, even dangerous”.
“We are concerned that where individual advisers have not sought and received legal advice which will afford them a strategy suited to their specific situation, there is a strong possibility of a poor outcome for them.”
“AMP advisers need not fear persecution by anyone by separating themselves from the pack and obtaining their own advice. Having been the providers of advice for many years, I would now encourage AMP advisers to get their own advice, and not rely upon second or third hand rumour, or ‘big’ generalised commentary from people whose motivations are unclear.”
Mackay said he believed AMP advisers broadly fell into four categories – those who gave notice under BOLR prior to AMP announcing its changes, those that gave notice after the AMP announcement, those that did not give notice under BOLR and would continue to operate and those who had received a termination letter.
He said he believed it was sensible for advisers to approach the BOLR issue by keeping in mind which category they belonged to and what their individual needs are.
Mackay said many of advisers who had sought to exercise their BOLR rights ahead of the AMP announcement were facing deadlines under the process right now.
“A key deadline is the Exercise Date. For some advisers, their Exercise Date has passed without any formal exercise by AMP of its right to a six-week extension. Moreover, some of those advisers are yet to receive valuations (or even be told when a valuation is likely to be forthcoming),” he said.
“Moreover, in some instances, BOLR audits are incomplete, responses to BOLR audits have not been received and/or ‘look back audit’ processes are seemingly hanging over the heads of advisers like the Sword of Damocles.”
