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Ombudsman refers over 60 AMP BOLR cases

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has referred more than 60 complaints from advisers terminated by AMP due to write-downs of their BOLR contracts to mediation in what it calls a “heartbreaking” mistreatment of the group’s long-term authorised representatives.

ASBFEO Kate Carnell told ifa the group had referred 63 BOLR cases to mediation out of more than 100 complaints received from former AMP advisers.

Of these, 18 cases had settled, 25 had been withdrawn and five had failed to reach a satisfactory settlement, while 15 were still in progress.

Ms Carnell said a number of advisers had also opted to "wait and see" around the results of other advisers' mediations before going through the process themselves.

"Some of the 72 that didn’t go to mediation were going to see if the people who did go to mediation [got] deals that warranted the time, effort and anguish," Ms Carnell said.

"It’s a process that is very user friendly but I think some of them said 'we’ll wait and see' and others have said we’re going to accept this and get on with our lives, because it’s all too horrible."

Ms Carnell said AMP's write-down of adviser businesses was "heartbreaking" and the contract terms agreed to by advisers would have been in breach of unfair contracts legislation had they been executed at a later date.

"The unfair contract terms legislation was [introduced in] 2017, so it only applies to contacts that were signed after that and many of these guys have been advisers a long time," she said.

"What AMP had in those contracts [was] that they could change them – if there was a legislative change, fine, but also if there was problem with their business, or a financial issue, things that encompass just about anything.

"It’s a lesson to everybody to read the contract, but for these financial planners, they were working with AMP for 15 to 20 years, and I think they just thought they were part of the AMP family. It turned out that they weren't."

Ms Carnell said ASBFEO had briefed both Assistant Minister for Superannuation, Financial Services and Fintech Jane Hume, and Minister for Employment, Skills and Small Business Michaelia Cash on the issue, which was "of public interest".

"I wish we had the capacity to push this harder, because it shows the dilemma of having contracts that are fundamentally unfair, that allow one side to change the terms and conditions without the agreement of the other side," she said.

"These people are just small businesses that were operating with AMP contracts and products, they were audited by AMP regularly and they were doing everything that AMP told them to do.

"Fundamentally, they are picking up the tab for the fact that AMP had problems with the royal commission and was rightly found to be behaving not in line with community expectations."

Editor's note: Comments below this article may discuss suicide. If this raises any emotional or psychological issues for you, you can utilise the below resources:

Lifeline, 13 11 14, www.lifeline.org.au
Suicide Call Back Service, 1300 659 467, www.suicidecallbackservice.org.au
MensLine Australia, 1300 78 99 78, www.mensline.org.au

Comments (75)

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  • How do I compete with an adviser that can get an independent survey that costs $8,000 completed for free, (paid for by AMP) than wins an AMP in-house award based on that survey, and funds under management and revenue, who then proceeds to call himself the "Adviser of the Year." and keeps calling himself that for the last 3 years, whilst referring to his "register". Gets his advertising and business running costs paid for or subsidized by AMP and makes no reference to AMP, whatsoever. And this adviser then competes directly with me, and you want me to be sympathetic. Don't get me started on over regulation. Give me a break AMP advisers. It's a cultural thing from the top top the bottom and you guys all got bitten and you're still expecting the blood from your customers stone.
    0
    • You missed the point - this has nothing to do with AMP and everything to do with bullying tactics.
      -2
      • It's more so about right or wrong. One group of individuals with low morals, being attracted to another much larger group with low morals and expecting some type of justice and sympathy from the wider population.
        0
  • AMP deserve no business Monday, 13 July 2020
    AMP are heartless and unconscionable, always have been. Don't write their business in any shape or form (wealth, platform, mortgages). Boycott them and let them suffer.
    -1
    • That's easy given AMP relied on a sales force to distribute their products and they're culling them. In 20 years of being an Adviser I haven't ever met anyone outside AMP going out of their way and recommending AMP products. After all the cost of BOLR was built into products. They're relying on call centres now.
      1
  • @ wonder dog. Yet another client seen in a crappy AMP product paying 2.73% ongoing MER with a 10 year performance in the last quartile and marginally bettter than cash. You guys don't even have customers. You've got something referred to as a Register that your suck the blood out of for four years before handing back. Usually at least 1,000 clients per adviser. Given the amount of over regulation, I have little sympathy now.
    1
    • AMP advisers have used far more than just AMP product.
      -1
    • I feel this is quite multi-faceted.

      Should AMP honor contracts, yes absolutely.

      Do I feel bad for any adviser that had clients in their horrendously outdated, expensive and underperforming products? No.

      Any adviser with 1,000+ clients wasn't servicing their clients anyways so I cant feel bad for them. As you say its a 'register'... That's not exclusive to AMP though.
      0
  • Just because AMP can doesn't mean that they should destroy the lives of small businesses.

    It is abhorrent or unethical behavior from AMP.

    5
  • Unfortunately more people I know in the situation with AMPFP have accepted their fate. It is hard to individually argue against a publicly listed company which has no ethics.
    2
  • These institutions need to be held to account. They feed off each other for their moral courage.
    4
  • I have never, ever seen an editorial comment like this in an article:

    "Editor's note: Comments below this article may discuss suicide. If this raises any emotional or psychological issues for you, you can utilise the below resources:"

    I agree with the editor. This is serious.
    4
  • Its no better at IOOF; they refuse to let you sell or take your client book externally, your are then forced to sell it internally (where there are no buyers) and then eventually buy it off you under their "terms" at a significantly reduced BOLR price because 'there are no buyers'.
    6
    • Isn't AMP allowing advisers take their clients elsewhere now, as part of the trade off for reduced BOLR?
      3
  • Got to love statistics...
    Withdrawn means didn't want to waste time proceeding as one party wasn't negotiating.
    Settled means adviser was too emotionally damaged to proceed and decided to accept whatever just to end it.
    3
  • What I don't fully understand legally is ‘917E Responsibility extends to loss or damage suffered by client The responsibility of a financial services licensee under this Division extends so as to make the licensee liable to the client in respect of any loss or damage suffered by the client as a result of the representative’s conduct.’ So why do AFSL's even think they have a legal right to reclaim FFNS from the advisers?
    4
    • FFNS likely in contract Monday, 13 July 2020
      I would think that the Adviser / Authorised Rep agreement would clearly state that the Adviser actually does the work for the fees and if there is any problem then AMP have the right to claw it back off the Adviser. they would be stupid not to have such an agreement.
      0
      • You would think. But I've seen some of these and there is no mention. Simply if you follow Licensee Standards. And it was well known that a Letter of Offer for Review only, was sanctioned by Licensees as the correct standard. It is hard to see how they can now say, we erred on that guidance, oh and now we need some money back to make good to the clients, for over 10 years worth of fees.
        0