Members of the AMP Financial Planners Association (ampfpa) are stepping up action to contest changes announced by AMP.
On 8 August this year, AMP announced that it planned to cull its adviser network and reduce the amount it would pay under its Buyer of Last Resort (BOLR) terms to exiting advisers from four times recurring revenue to a maximum of 2.5 times.
Ampfpa CEO, Neil Macdonald says, “This action was taken without consultation with ampfpa, without the required 13 months’ notice to advisers, and after AMP assurances that existing BOLR arrangements would not change.”
He noted that as recently as May 2018, AMP Financial Planning’s then managing director met with AMP practices around Australia to reassure them that prevailing BOLR terms would remain the same.
“Based on this assurance, many practices may have made a decision to stay on with AMP last year, rather than exercising their BOLR rights,” said Macdonald.
The ampfpa surveyed member practices about the action they want to take and confirmed it received a response rate of over 90 per cent. Macdonald said of those who responded, over 93 percent indicated they support legal action.
“Our members intend to hold AMP accountable for the severe financial, reputational and psychological harm it is inflicting on its own advisers.”
Ampfpa has since arranged legal packs outlining the available options for its members and is seeking additional information from them.
“We are aware that tier one legal firms are prepared to run a class action against AMP and funders are available at very competitive terms,” Macdonald said. “Our members intend to hold AMP accountable for the severe financial, reputational and psychological harm it is inflicting on its own advisers.”
The ampfpa stated is has also:
- Prepared an issues paper on behalf of its members, as well as member questions for AMP
- Invited AMP senior management to attend a meeting in September with advice practices staying on with AMP
- Written directly to individual members of the AMP Board of Directors outlining ampfpa’s concerns
Ampfpa stated this letter followed two previous letters that the association sent directly to each individual member of the AMP Board on 5 August 2019 and 7 August 2019, both of which were ignored.
“The response we received to the third letter came from AMP management and does not inspire us with much confidence,” he said.
Macdonald said the ampfpa objects to suggestions that the advisers currently being culled by AMP are those who will not be able to meet new compliance obligations or will not be able to transition to a fee-for-service practice.
“It has been reported in the media that AMP has identified practices that won’t make it through the transition because, ‘their business economics simply aren’t strong enough’. In our opinion, what this actually means is that AMP thinks they cannot profit from these practices and so is organising their exit. This does not excuse AMP from honouring the agreements it has with these practices and the BOLR terms that were in place before 8 August 2019.”
Come on people, why did I NEVER recommend AMP to any client in 30+ years? When I started as a sales manager and then became an agent in 1987, AMP was like the Magpies in the AFL. If you weren’t an AMP supporter, you ‘hated’ them. AMP always played god, and they ensnared their tied agents tighter than a python its prey. Why would they bother to have free and open discussions with their Planners Association now? It would go against everything AMP has ever been and done.
Agree categorically, PS. AMP is and always has been ‘if you aren’t AMP, you’re dodgy and shouldn’t be in the industry’. It’s an organisation now reaping the consequences of decades-long mistreatment of its field agents.
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