Exit contracts ruling advisers out of AMP class action

In a recent episode of the XY Adviser podcast, former AMP adviser David Haseldine said recent developments in the case had seen AMP taken to task for hidden clauses in its exit contracts which excluded departing planners from participating in the action brought against the wealth giant earlier in the year.

“It’s come out as part of the class action hearing - Corrs [Chambers Wesgarth] said to the judge ‘this is just wrong’, so the concession was now AMP have to spell out to people that they want to have sign these contracts that if they do sign they will be waiving their rights,” Mr Haseldine said. 

“They are still putting these bullshit contracts in front of planners, but they’ve got to spell it out that if they do sign they will be waiving their rights. I don’t know how this is going to play out, but it’s all sorts of wrong.”

Mr Haseldine, who purchased a book of majority grandfathered commission clients from AMP in 2015 for $240,000 using a loan from AMP Bank, said he had failed an audit of 15 ongoing fee arrangement client files in February, after having his practice value reduced when AMP wrote down its BOLR values in August 2019.

“That gave AMP the ability to turn off the fees to those clients. Going back the last two years since the royal commission, my practice was struggling, so you turn off the fees to half my ongoing fee clients and I’m pretty much insolvent,” he said.

Mr Haseldine said AMP Bank offered to make his debt interest free in return for taking his home as security, but he declined after discovering terms within the contract said the bank was able to put the loan into default “at their discretion”.

Responding to Mr Haseldine's comments in the podcast, an AMP spokesperson said, "AMP Bank's priority is supporting advisers, addressing their unique needs and circumstances so fair and reasonable outcomes can be reached".

Mr Haseldine said he had handed in his authorisation with AMP and managed to refinance the debt through a third party without signing a settlement deed with the company, which would have “waived [my] rights against all future actions against AMP” and left him unable to work as an adviser for a number of years.

“I’m now moving on with my business and my life - I’m $200,000 in debt over and above the value I’ve lost over the last 10 years being associated with AMP, but I have loyal clients so I’ve been able to retrieve some of it,” Mr Haseldine said. 

“But for the guys that have had no option but to take the crumbs AMP has left on the table and sign away their rights in the process that are still in debt and can’t work for three years, they are the guys and ladies I really feel for because there’s a distinct lack of hope for that group, which is a horrible place to be.”

The comments come following recent ifa reporting that exiting AMP planners were not being allowed a proper appeals process after failing file audits, which could see them lose the full value of their business under the terms of their commercial agreements with the wealth giant.

A spokesperson for AMP told ifa at the time there was “a process for advisers should they wish to have their audit reassessed and present additional information”.

“The BOLR audit is a thorough process designed to ensure advisers receive fair and appropriate valuations based on the quality of their business and fulfillment of their service agreements with clients,” the spokesperson said.