AMP Points Finger at Advisers

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.

AMP Acting Chief Executive, Michael Wilkins

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.

  • Ben

    Ah good old AMP trying to move all the blame on to someone else. Unfortunately for you AMP your other indiscretions ensure your arguments don’t hold much water. You cannot distance yourself from poor advice when you are meant to have systems in place to pick up that poor advice prior to it being provided to your clients. That is nothing but a cop-out on your behalf, plain and simple. Once again trying to tar all advisers with the same brush and make the institutions look squeaky clean. Sorry too late!

  • Dave

    Unbelievable!! AMP doesn’t seem to appreciate that the buck stops with the licensee. If certain advisers were doing the wrong thing then the licensee’s audit and compliance process should have picked it up. Perhaps they are just trying to divert attention away from the fact that they deliberately lied to ASIC 20 times. Unfortunately their credibility is rather low at the moment.

  • Ken

    Unbelievable !! That’s the only word for it Do they really expect the public and the commission to swallow it
    If anything it is shooting your self in both feet

  • Alan

    AMP comprises human beings and those individuals be they the CEO or the Board or any managers, should bow their heads in shame for simply blaming advisers.
    If they took any damn leadership or the responsibility that they are paid big fat salaries for, all this bad behaviour may not have occurred.

  • JM

    Alan, Ken, Dave, Ben,
    I wonder what the facts are? My best guess is:
    1: The Royal Commission asked all companies to provide details of known issues of breaches or where they may have fallen short of ‘customer expectations; [This is fact]
    2: AMP subsequently will have provided to the Royal Commission details of cases they already had dealt with via their own internal processes. Ie as requested by the RC.
    3: The RC raise these instances
    4: AMP say we knew about them and dealt with them and as a result these people are no longer with AMP
    So, my best guess is perhaps different to yours. I suspect AMP are doing exactly what you want them to be doing – turfing poor advisers. And all they are doing is confirming that to the RC.
    Just because we have a headline in this article, doesn’t make it true.