Will AMP’s $100m settlement end advisers’ BOLR fight?
The decision by AMP to pay $100 million in settlement to members of the Buyer of Last Resort (BOLR) class action has been welcomed as providing closure, but one adviser said he intends to fight on.
Yesterday (23 November), AMP announced it will pay $100 million to settle the class action, via mediation, and did not make any admission of liability. This is double the volume set aside in provisions in August and will address all aspects of the class action, including the proposed appeal.
Alexis George, AMP CEO, said: “This is an important step for our advice business and for AMP more broadly as it allows us to put this legacy matter behind us, which has impacted relationships with our valued advisers."
The class action was filed with the Federal Court in Melbourne back in 2020 on behalf of advisers who had been authorised by AMP Financial Planning Pty Limited (AMPFP). The claim related to changes made by the firm to its BOLR policy in 2019. This had seen AMPFP cut its BOLR terms without notice from 4x recurring revenue to a maximum of 2.5x.
The verdict was issued by Justice Mark Moshinsky on 5 July, ruling that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
Responding to the settlement, Neil Macdonald, chief executive of The Advisers Association, said the decision would provide closure to members of the class action, who are represented by law firm Corrs Chambers Westgarth.
“Taking matters to court is a long process, often difficult to understand, expensive and stressful. We extend our heartfelt thanks to our members for their enduring patience, which helped pave the way to this outcome.
“The settlement still needs to be approved by the court, and what it means for each member of the class action individually still needs to be worked out by Corrs. What we can say at this stage is that it provides some closure and allows all concerned to look to the future.
“This settlement indicates to us that AMP wants to move forward from the past.”
However, a former AMP planner and member of the class action has told Money Management that this is not the end for him.
David Haseldine said: “The fact that AMP has been able to manoeuvre out of the whole situation so cheaply is a sad indictment of the system.
“Justice Moshinsky’s ruling back in July still stands, so in effect, if nothing else, the class action has done all the heavy lifting for the literally hundreds of advisers that are still feeling very much aggrieved at this result.
“AMP’s spin is that they have put the matter to bed, so now everyone can move on. The reality, in my opinion, is a polar opposite. Instead of doing the right thing by offering an appropriate settlement, AMP has not only given further motivation to the aggrieved planners, but it has given them the financial means to line up to take AMP to court.”
AUTHOR
Laura Dew
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I've currently got a solicitor preparing something. Good to see that Neil MacDonald is still supporting AMPFP rather than the advisers he was supposed to support.