AIOFP mounts new action on commission removal

In a recent communication to members, AIOFP executive director Peter Johnston said the adviser association had been approached by “a group of advisers wanting to seek damages against the financial institutions who prematurely shut down their grandfathered revenue during 2020”.

“These [actions] led to hundreds of millions of dollars being retained by the institutions that was legally owned by advisers,” Mr Johnston said. 

“This action was arrogantly endorsed by Treasury/ASIC, which was of course eagerly obeyed by the institutions.”

Mr Johnston confirmed the group had secured financial support from a litigation funder and were now seeking more advisers to join the class.

“This should be of particular interest to the AMP/Hillross advisers who have been unfairly smashed in recent times,” he said.

Mr Johnston added the funder would be taking 30 per cent of the proceeds of any successful outcome as a result of the action.

He said more detail around the basis for the case would be announced at the group’s annual conference later this month.

The industry body flagged in 2019 that it was searching for a legal partner to take up a case against early commission removal on behalf of a cohort of its members, after ANZ wrote to clients more than 18 months ahead of the January 2021 deadline encouraging them to proactively contact their adviser to get the payments cancelled.

The AIOFP also attempted to mount a potential High Court challenge to the legality of banning grandfathered revenue after the royal commission, but the action fell over after it failed to reach its fundraising targets, and an individual adviser to stand as a ‘test case’ could not be found.