CBA, Westpac and AMP facing new FoFA-related class actions
Commission-based remuneration and the implementation of the Future of Financial Advice (FoFA) legislation will be wheeled into the courts again, with a legal firm announcing it is preparing class actions against AMP, the Commonwealth Bank and Westpac and their former dealer groups.
The legal firm, Piper Alderman said it was planning to bring a series of class actions arising out of a failure by the institutions to properly engage with the changes designed to be implemented by the FoFA reforms.
In a statement issued late on Friday, Piper Alderman said the Financial Services Royal Commission had uncovered serial misconduct and “Piper Alderman is now planning to bring claims designed to compensate customers of three institutions who were charged commissions in contravention of the law”.
“More particularly, Piper Alderman’s claims will allege that AMP financial services licensees (AMP Financial Planning, Charter Financial Planning, and Hillross Financial Services), CBA financial services licensees (Commonwealth Financial Planning, Count Financial and Financial Wisdom) and Westpac financial services licences (Securitor and Magnitude) contravened specific obligations owed to their customers when taking commissions from product issuers and/or customers themselves.”
The actions will be backed by litigation funder, Woodsford Litigation Funding and will seek the return of commissions to clients.
Commenting on the move, Piper Alderman partner, Martin del Allego said the FoFA reforms were designed to protect customers and the Piper Alderman claims would “demonstrate these institutions’ failure to do just that”.
“These claims have the prospect of recovering significant sums of money for a large number of individuals. On the institutions’ own numbers, over a million individuals may have been affected. We are encouraging any individual who acquired, renewed or continued to hold a financial product (including life insurance) on the advice of an adviser from one of these institutions to register their details with us.”
Del Allego and the other partners claimed the claims that would be made by the company did not overlap with other already commenced actions against the financial institutions.
Both the Commonwealth Bank and Westpac have sold out of their financial planning businesses but have indemnified the new owners against legal action relating to past events.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
