ASIC sues AMP companies for fees for no service

ASIC commenced civil penalty proceedings in Federal Court on Friday against six companies that are, or were, part of the wealth group including AMP Superannuation, AMP Life, AMP Financial Planning, AMP Services, Charter Financial Planning and Hillross Financial Services.

It’s alleged that between July 2015 and April 2019 the companies charged advice fees to 1,540 customers despite knowing that those customers were no longer able to access the relevant advice and failed to ensure that a system that did not charge customers who had left the account was in place.

ASIC has alleged AMP received over $600,000 in advice fees.

AMP responded to the news on Friday morning.

“In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a plan service fee after delinking from their corporate super plan into a retail account,” a statement read.

“AMP took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process.

“The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fees charged and lost earnings.”

A hearing date is yet to be set.

The news comes after AMP announced a shake-up to its advice model on Monday, including the conclusion of client register buy-back arrangements for its authorised representatives.

Speaking on a conference call to coincide with the announcement, AMP’s head of advice, Matt Lawler, discussed how many advisers will opt to exit the company by year’s end, given it will cease buyer of last resort arrangements.

Though he would not speculate on how many will exit, AMP remains confident all can be managed.

“We’re not going to talk about numbers, because obviously that’s going to play itself out,” Mr Lawler told ifa.

“But we have a team that specialises in mergers and acquisitions and supports our advisers. We expect a lot of these businesses will be picked up.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.