TAA Supportive of Members in Class Action

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The Advisers Association (TAA), has issued a statement announcing that it’s supportive of its members, following the filing of an ‘open’ class action against AMP Financial Planning (AMPFP) on behalf of AMP financial planner members by Corrs Chambers Westgarth in the Federal Court of Australia.

TAA’s members are all all authorised representatives of AMP Financial Planning and Hillross Financial Services.

TAA CEO, Neil Macdonald, says many members, both those exiting and those staying, have joined the class action, which follows AMPFP’s decision to reduce its adviser network and cut the amount it would pay for their businesses under its Buyer of Last Resort (BOLR) terms, without notice, from four times recurring revenue to a maximum of 2.5 times.

Neil Macdonald …TAA would have preferred, and continues to prefer, that AMPFP work with the association to negotiate fair and reasonable outcomes for all members…

Macdonald says TAA would have preferred, and continues to prefer, that AMPFP work with the association to negotiate fair and reasonable outcomes for all members.

“This is obviously imperative for those who are exiting, but it is just as important to those who are staying, so that they can continue to provide Australians with affordable access to financial advice.”

The statement says that the  Australian Small Business and Family Enterprise Ombudsman has referred more than  60 BOLR-related cases for mediation, after receiving more than 100 complaints from AMP financial planners related to the BOLR changes. ALP Senator Deborah O’Neill has called for a review of AMP’s behaviour.

(See: AMP Called On to Waive Adviser Debt).

Macdonald says that many members had bought businesses from AMPFP at four times recurring revenue, on the promise that AMPFP would acquire their businesses back on the same multiple when they leave, a key plank in AMPFP’s ecosystem.

“These are businesses that were valued by AMPFP for lending purposes at four times recurring revenue and in most cases were funded by AMP Bank loans or via another tripartite banking arrangement, again at four times recurring revenue,” he says adding that in many cases advisers had to put up their family homes as security and are now at risk of losing them.

“Many of our members stated they had little choice but to join the class action,” he says.



2 COMMENTS

  1. Class actions are not just the preserve of individuals and small Business taking on Big Business.

    Governments can be held accountable and with the direction the advised Life Insurance Industry has been forcibly led, the mistakes Regulators have made and continue to make, to the detriment of not only advisers and their practices, but also the millions of Australians who are being put into a position of not being able to afford advice, the case is very strong.

    The thousands of advisers who have had their lives turned upside down, are being pushed towards taking this action.

    The Government needs to put a leash on ASIC and have a very serious rethink of their position.

    There is too much water under the bridge, the Government and the Regulator have made too many mistakes and too many promises of a better future with their Life Insurance Frame work restriction of trade Regulations and requirements, including the FASEA fiasco.

  2. Never been an AMP fan ! This latest disgraceful act to their advisers confirms my thoughts
    Go guys i really hope you have a big win.

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