ASIC sues AMP firms for fees-for-no-service
The corporate regulator has taken six companies that are, or were, part of AMP Limited to the Federal Court after charging $600,000 in fees-for-no-service on corporate superannuation accounts.
The Australian Securities and Investments Commission (ASIC) alleged that the companies charged advice fees to over 1,500 customers despite knowing the customers were no longer able to access the relevant advice.
ASIC said it sought declarations, pecuniary penalties and adverse publicity orders to be made by the Federal Court.
ASIC further alleged that from July, 2015, to April, 2019, the AMP companies:
- Deducted financial advice fees from 1,540 customers’ superannuation accounts despite being aware that the customer had left their employer-sponsored superannuation account and therefore could not access the advice for which those fees were paid;
- Failed to ensure that a system was in place that did not charge customers who had left their employer-sponsored account; and
- Contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly.
The six AMP companies were:
- AMP Superannuation Limited;
- AMP Life Limited, which is now owned by Resolution Life NZ, but was part of AMP when the conduct occurred;
- AMP Financial Planning Proprietary Limited;
- AMP Services Limited;
- Charter Financial Planning Limited; and
- Hillross Financial Services Limited.
ASIC noted this followed proceedings by ASIC against AMP companies that allegedly charged life insurance premiums and advice fees to over 2,000 customers despite being notified of their death.
In an announcement to the Australian Securities Exchange (ASX), AMP said it acknowledged the civil proceedings by ASIC concerning the “historic charging of Plan Service Fees”.
“In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a Plan Service Fee after delinking from their corporate super plan into a retail account. Amp took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process,” it said.
“The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fees charged and lost earnings.”
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
