ASIC sues AMP firms for fees-for-no-service

ASIC/amp/amp-superannuation/Charter-Financial-Planning/hillross/amp-financial-planning/

30 July 2021
| By Jassmyn |
image
image
expand image

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.”

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 3 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks 2 days ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND