How much longer for impacted AMP class action members?
The Advisers Association has expressed disappointment at AMP’s decision to appeal the BOLR verdict while AMP’s Matt Lawler says he hopes to reach “an outcome that allows us to put this behind us”.
Yesterday, AMP announced in a statement to the ASX that it will be appealing the decision by Justice Mark Moshinsky in July that found in favour of the class action group.
The class action was filed in the Federal Court in Melbourne back in 2020 on behalf of advisers who had been authorised by AMPFP. The claim related to changes made by the firm to its Buyer of Last Resort (BOLR) policy in 2019.
This had seen AMPFP cut its BOLR terms without notice from 4x recurring revenue to a maximum of 2.5x.
In July 2023, Moshinsky ruled in favour of the class action group, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
The following month, AMP CEO, Alexis George, announced it has set aside $50 million in provisions which was its "best estimate of the judgement".
In late August, Justice Moshinsky then ordered that AMP pay Equity Financial Planners, the lead applicant in the Corrs Chambers Westgarth-led class action, $814,944.76 and over $151,000 in interest. He set aside a decision on the costs for other members of the class action.
Commenting on the decision to appeal, Matt Lawler, AMP group executive for advice, said he was aware that the proceedings had a significant impact on the advisers involved. However, he felt the AMP did have grounds for an appeal.
“While we believe we have grounds on which to appeal, we also recognise the ongoing impact the proceedings are having on practices, with whom we’ve worked hard to rebuild strong and trusted relationships,” he said.
The firm also agreed to mediation, which will begin in November 2023.
“We value these relationships and that’s why we are fully committed to the upcoming mediation process in November 2023, with the aim of reaching agreement on an outcome that allows us to put this behind us,” Lawler added.
But Neil Macdonald, chief executive of The Advisers Association and ampfpa (an organisation representing financial planning practices in the AMP Financial Planning network), said he was “disappointed” by the decision to appeal, given it had already been ruled that AMP’s conduct was “unconscionable”.
He said: “We are extremely disappointed that AMP has chosen to appeal what was a conclusive judgment by Justice Moshinsky. We genuinely believe His Honour already took all the matters raised by AMP into consideration.”
Lawler had referenced putting the matter behind us regarding mediation, and Macdonald agreed the matter should be resolved as quickly as possible.
“It has already been a lengthy, expensive and stressful process for all our impacted members.”
AUTHOR
Laura Dew
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
Wow! These guys just don't learn!!! A new CEO, a new AMP Board, new Senior Management, absolutely brutalised in the ruling by the judge BUT the same outcome??? Who is actually running this rock show???
Beggars' belief with AMP - found by the court to what we all know was the egregious case of theft (I really dont know how else to describe their actions in destroying business) - and breach of contract only to snub the ref's call. I am sitting here thinking how lucky I was to trust my instincts and not put my business and house on the line to get into bed with that mob.