Advice community unites to condemn AMP decision

In a statement on Wednesday, AMP confirmed that AMP Financial Planning (AMPFP) will appeal the Federal Court judgment that found the wealth giant was not authorised to make immediate changes to its buyer of last resort scheme.

In July 2023, Justice Mark Moshinsky ruled in favour of a class action group, in relation to the wealth giant’s controversial decision to change its Buyer of Last Resort (BOLR) scheme, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.

Justice Moshinsky also found that AMP’s treatment of the sample group member was, “in all the circumstances, unconscionable”.

While it’s been over two months since the matter was settled in court, AMP has decided to appeal while also committing to engage in mediation in November.

“While we believe we have grounds on which to appeal, we also recognise the ongoing impact the proceedings are having on practices, with whom we’ve worked hard to rebuild strong and trusted relationships,” said AMP’s group executive, advice, Matt Lawler on Wednesday.

“We value these relationships and that’s why we are fully committed to the upcoming mediation process in November 2023, with the aim of reaching agreement on an outcome that allows us to put this behind us.”

Commenting on AMP’s decision, Sarah Abood, the chief executive officer of the Financial Advice Association Australia (FAAA), told ifa that while the body doesn’t have an official position, she personally feels for the advisers.

“I think what everybody is looking for is some certainty and some closure, in relation to that matter,” Ms Abood said.

“I would note that AMP has said that they are keen to mediate and I imagine that that is something that would be a good thing.

“I think that for most advisers, they want a speedy resolution of this matter. It’s been going on for quite a long time and they need the certainty for their own businesses and their own future.”

Similarly, Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals (AIOFP), said the body is “disappointed with the attitude of the AMP decisionmakers”.

“These advisers and their families have been to hell and back. Appealing is just another ‘kick in the guts’ to those who followed the rules put in place by AMP who then tried to change them,” said Mr Johnston.

Back in July, the head of policy at the FAAA, Phil Anderson, said the banning of grandfathered commissions and AMP’s changes to the BOLR scheme have had “dire consequences” for countless advisers.

“I had a number of conversations with people who did it really tough at that time. Many of them have ultimately left. But their retirements will be seriously impacted by the combination of those two things,” Mr Anderson explained.

He added at the time that, while a portion of lost funds may be recovered, the emotional toll these changes had on advisers should not be understated.

“Some put themselves into bankruptcy. Some had substantial mental health challenges and there are a lot of people that had to do what they could to help their colleagues through this process.”

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