-
Get the latest news! Subscribe to the ifa bulletin
Powered by
MOMENTUM
MEDIA
Get the latest news! Subscribe to the ifa bulletin
The controversial AMP “spreadsheet” demanded as evidence by the royal commission demonstrates the levels of in-house product recommendation at AMP Financial Planning.
In her opening address to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on Monday, counsel assisting Rowena Orr castigated AMP for providing a key piece of evidence at 9.30pm on the night before the second hearings were due to commence.
In the final minutes of yesterday’s proceedings, her colleague counsel assisting Michael Hodge QC clarified that an email copy of the required spreadsheet was actually sent after 5pm on Wednesday 11 April and a further copy after 9.30pm on Sunday night.
But notwithstanding the to and fro over the evidence deadline, Mr Hodge said now that his team has had an opportunity to assess the document, it contains significant information about “the proportion of in-house products on the approved product lists of AMP’s licensees”.
“It contains information about four of AMPs licensees: AMP Financial Planning, Charter, Hillross and ipac,” Mr Hodge said.
“We won't summarise the position for all four licensees, however, in relation to the largest licensee, AMP Financial Planning, it shows that in each year since 2013, between 35 and 40 per cent of the investment options on the approved product list were in-house products, more than 90 per cent of the new customers invested funds in or paid insurance premiums in respect of one or more of AMPs in-house products, and the proportion of funds invested in or insurance premiums paid in respect of AMPs in-house products as opposed to external products by new customers was more than 70 per cent,” Mr Hodge revealed in an indication of further cross-examination to come on the topic of approved product lists.
The findings follow an ASIC report that lifted the lid on in-house product recommendation across the major financial institutions which Ms Orr also referenced in her opening address.
In his final address he also clarified that a statement from AMP director of advice and research Bradley Green has identified 13 incidents of AMP authorised representatives accepted “prohibited conflicted remuneration” in the post-FOFA period.
Two of five examples of these 13 incidents were not disclosed to the royal commission, Mr Hodge said.
The revelation followed an intense full-day cross-examination of AMP executive Jack Regan, in which he admitted he had a “level of discomfort” with the amount of AMP involvement in a so-called independent report conducted by commercial law firm Clayton Utz.
The royal commission financial advice hearings continue on Wednesday. Follow live at https://www.ifa.com.au/strategy/25404-royal-commission-financial-advice-hearings-live-blog
Never miss the stories that impact the industry.
Get the latest news! Subscribe to the ifa bulletin
Comments (12)
The question the RC should really be asking is whether Charter, Hillross and ipac are deceptively branded to appear as if they are independent, while actually recommending lots of AMP product that the client wasn't expecting. The RC needs to stop being guided by ASIC who are hopelessly disconnected from reality, and just use their own common sense. Licensee branding is a much more important issue than APLs.
RB
The true test is what does ASIC do when it knows that AMP has made a fool of ASIC by lying to it on at least 20 occasions. Yes, Mr ASIC Commissioner, those lies are offences. If this was a small to medium licensee it would be in all sorts of problems with senior execs facing charges laid by ASIC and the licence in jeopardy unless the licensee causes certain managers to 'depart'. Let's see how brave ASIC is when dealing with AMP. Hopefully better than its prior dealing with some of the big 4 banks.
I suspect this exercise will prove what that vocal minority have been saying for years is correct i.e. that there is one law for the big 5 and another law for the rest.
Funny how one end of town can get away with blatant acts, and yet the other end is hauled over coals. Also wonder if AMP wasn't a public company and forced into many layers of transparency, whether their attitude to the RC would also be different?
What we have not heard is the research on whether the in house investment solutions achieved their objectives or not. The relevance being that if the in house investment solution worked why the hysteria that this was recommended to the client ? If the argument is that their is a conflict of interest how will that ever be removed given that the investment advice and strategy are linked ? How would the clients have been better off if the adviser recommended another fund rather than AMP? It is naïve to expect that every client will be offered a different investment product. How on earth can an advice business keep on track and service clients in a range of products and how is that beneficial to the client ?