AMP has announced that an agreement has been reached to settle the Buyer of Last Resort class action, with its CEO also noting the company has worked hard in recent years on rebuilding the relationship with advisers.
In a brief ASX statement AMP states that the class action was brought on behalf of certain advice practices authorised by AMP Financial Planning as of 8 August 2019.
“The proceedings challenged the validity of some of the changes made by AMPFP to its Buyer of Last Resort (BOLR) policy in August 2019.”
AMP states the settlement is for a total of $100 million “…and is subject to the finalisation and execution of a deed of settlement and approval by the Federal Court of Australia.”
AMP made a provision of $50 million in its 1H 23 financial statements based on the judgment of 5 July 2023 (see: Judge Rules Against AMP in BOLR Class Action).
“Today’s settlement covers the class action in its entirety, including where there has been no judgment. In reaching a settlement, AMP makes no admission of liability,” the company says.
…this is an important step forward for our advice business…
Alexis George, AMP Chief Executive says this is “…an important step forward for our Advice business and for AMP more broadly, as it allows us to put this legacy matter behind us, which has impacted relationships with our valued advisers.”
She says the company has “… worked very hard in recent years on rebuilding the relationship with advisers and we’re looking forward to working with them in the delivery of quality financial advice, at a time when Australians need it more than ever.”
Response from TAA
TAA CEO, Neil Macdonald notes the settlement still needs to be approved by the Court, and what it means for each member of the class action individually still needs to be worked out by law firm, Corrs Chambers Westgarth.
…What we can say at this stage is that it provides some closure and allows all concerned to look to the future…
“What we can say at this stage is that it provides some closure and allows all concerned to look to the future,” he states.
Macdonald thanked TAA members and the board for their “unfailing support” of the class action.
“Taking matters to court is a long process, often difficult to understand, expensive, and stressful. We extend our heartfelt thanks to our members for their enduring patience, which helped pave the way to this outcome.”
Macdonald also says the outcome “…would not have been possible without the courage of the lead applicant, Equity Financial Planners and sample group member, Wealthstone.”
He says the principals of both these practices “…showed enormous strength and resilience under extremely difficult circumstances.”
Macdonald also acknowledged the new AMP leadership team’s part in the mediation process.
“This settlement indicates to us that AMP wants to move forward from the past.”
TAAA noted the class action against AMP Financial Planning was filed on behalf of AMP financial adviser members by Corrs Chambers Westgarth in the Federal Court of Australia three years ago.
