AMP advisers file class action

In an announcement to the market on Wednesday, the wealth giant said a class action had been filed against its subsidiary AMP Financial Planning in the Federal Court in Melbourne.

"The proceeding is brought on behalf of certain financial advisers who are or have been authorised by AMPFP," AMP said.

"The claim relates to changes made by AMPFP to its buyer of last resort policy in 2019. AMP is confident in the actions it took in 2019 and will defend the proceeding accordingly."

The news follows ifa reporting that a class action against AMP was imminent and would be brought on behalf of over 100 former AMP advisers by Corrs Chambers Westgarth.

The Adviser Association chief executive Neil Macdonald said the action was a necessary option following feedback from AMPFP advisers.

"We would have preferred, and we continue to prefer, that AMPFP work with the association to negotiate fair and reasonable outcomes for all members,” he said.

“This is obviously imperative for those who are exiting, but it is just as important to those who are staying, so that they can continue to provide Australians with affordable access to financial advice."

He added that BOLR values had been "a key plank of AMP's ecosystem" that the group's advisers had relied on when setting up their business.

"These are businesses that were valued by AMPFP for lending purposes at four times recurring revenue and in most cases were funded by AMP Bank loans or via another tripartite banking arrangement, again at four times recurring revenue,” Mr Macdonald said.

“In many cases advisers had to put up their family homes as security and are now at risk of losing them. Many of our members stated they had little choice but to join the class action."