AMP flags conflicts audit
Australia’s biggest dealer group, AMP Financial Planning, has endorsed the Financial Planning Association’s (FPA) principles on conflicts of interest by forming a taskforce to make sure its planners comply with the guidelines.
AMP head of distribution Steve Helmich said the group’s close to 1,200 planners would be audited and assessed on their ability to comply with the four principles, which were finalised two weeks ago.
Helmich, who will chair the taskforce, said AMP planners would also be reviewed on their compliance with PS 181 — the conflict disclosure rules set out in the Corporations Act.
He said AMP would try and complete the entire assessment by the time each of the principles becomes enforceable.
Similar to AMP’s annual practice accreditation program, which is performed each year to evaluate its planners’ skills, Helmich said the conflicts audit would help assist any planner found to be non-compliant to improve their standards.
At their formal release a fortnight ago, the FPA said the principles would be mandatory for its members and enforced, with maximum penalties being $20,000 fines or expulsion from the association.
The first of the four principles requires planners to separate the cost of advice from the cost of a product, and concerns have been raised that some product providers will not be able to assist planners to do so.
Helmich said AMP planners should have no problem complying with the first principle.
“We have for a long time been very clear with our fees, and separated the advice fee, so clients can see what they are paying for the advice.
“With some older products, it’s just not separated out, but certainly from the advice side we’d insist that it was separated out,” Helmich said.
Helmich also put to rest concerns that fund managers would have their administrative duties increased if a client were to elect to stop seeing their planner, explaining that clients would not have their advice fee cut off completely.
“We’ve got an area called the Client Care Centre (CCC), and that is specifically designed to deal with people like that. Any advice that the planner has dialled up, we remove. But there will still be a basic fee because we’ll be liable for the advice the planner has given, and the CCC will need to respond to client requests.”
Helmich, along with Securitor head Sean West and BT dealer group Magnitude chief executive Mark Spiers, all agreed that clients who go to a new dealer group would still be able to maintain their previous investment.
But there are concerns clients that move out of a badged platform to a different dealer group could be forced to switch their investments into a different product.
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