May 11, 2018
AMP has used two public statements within a single day to lay the blame for failures within its advice businesses at the feet of advisers, claiming its licensees were not to blame.
The company used a submission to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and comments at its recent Annual General Meeting, both released on 10 May, to distance itself from the advice detailed in three case studies at the Commission.
In both instances, AMP claimed individual advisers were responsible for the poor advice raised during the case studies.
In its submission to the Royal Commission, AMP agreed with the statement presented by Senior Counsel Assisting the Commission, Rowena Orr QC, that “…it is open for the Commissioner to find that each of the relevant advisers has breached their statutory obligations”.
AMP added this was the reason the advisers were no longer employed by the company and their clients had been referred to AMP’s Review and Remediation program.
The submission also stated that each of the three case studies detailed at the Commission showed “…an example of one adviser providing inappropriate advice, and potentially breaching his or her statutory obligations” and while they were serious matters “…they do not constitute grounds to find that AMPFP, Charter or Genesys contravened their statutory obligations”.
“…a small number of individuals in our advice business made the decision not to follow policy…”
In the same section of the submission, the company wrote that “AMP acknowledges that in the case studies identified, its systems and processes have not prevented inappropriate advice being provided to clients. However, that does not mean that AMP’s Advice Licensees engaged in misconduct as submitted by Counsel Assisting”.
Earlier in the day, AMP Interim Chair and Acting Chief Executive, Mike Wilkins told shareholders at the company’s AGM “…the historic problems identified in our advice business have been so confronting” and were at odds with what the company stood for.
Wilkins apologised to the meeting, adding “…the issues highlighted in our advice business are unacceptable” and addressed the issue of how the alleged advice failures took place.
“At AMP, a small number of individuals in our advice business made the decision not to follow policy, and inappropriately charged fees to customers where no service was provided,” Wilkins said.
“The situation was compounded through a series of communications that misrepresented the issue to – and therefore served to mislead – our regulator on several occasions,” he added.
Wilkins said AMP, in the past, had been unable to go public with any news regarding inappropriate advice as the matter was part of an extensive investigation, and it was currently in the process of reviewing ongoing fee arrangements which would lead to further customer remediation costs and associated expenses.