Counsel assisting Rowena Orr grilled AMP head of advice compliance Sarah Britt over an email from a former AMP executive specifically asking AMP staff not to supply a reference for an adviser in the process of moving to non-bank dealer group Dover Financial Advisers.
ifa understands that a number of AMP employees were copied on the email, with Ms Orr singling out a “Mr Scott” that is not fully identified.
The adviser in question, Adam Palmer, had failed numerous internal audits over multiple years, and AMP had just commenced action to terminate his employment when he tendered his resignation.
Further, Ms Britt confirmed that it was not AMP policy at the time (or now) to proactively alert other dealer groups to former staff’s misconduct or provision of inappropriate advice.
Ms Britt did note however that AMP has subsequently signed up to the ABA’s reference checking protocols and will now supply all dealer groups with references upon request regardless of whether that business is an ABA signatory or not.
The repeated audit failures and provision of inappropriate advice were also not reported to ASIC until the regulator made a request for information in response to concerns raised by Dover over Mr Palmer’s advice, Ms Britt confirmed to counsel assisting.
None of Mr Palmer’s clients have been remediated, and many of them have not been informed they received inappropriate advice, Ms Britt also confirmed.
The royal commission could not confirm that Dover had made a request to AMP’s Genesys licensee for information about Mr Palmer, with Ms Britt telling the commission AMP has been unable to find evidence of the request.
However, a source within the Dover organisation with knowledge of the matter – speaking to ifa on condition of anonymity – said Dover did in fact attempt reference checks on Mr Palmer but never received a response from Genesys.
Insufficient information provided by the banks has been a sticking point for non-aligned licensees seeking to conduct reference checks on formerly institutional advisers.
In a recent article published by ifa, Synchron chair Michael Harrison listed this behaviour at the top of the list of issues the royal commission should consider.
“The big four banks [and other institutions] do not supply adequate references for their departing financial advisers. In our experience, they withhold information and in at least one case we know of, a bank did not disclose that an adviser had been reported for a breach,” Mr Harrison wrote.
“In an industry that is trying to increase professionalism, we see this kind of behaviour by banks as being a serious issue.”
At a recent event in Sydney, Synchron director John Prossor welcomed the new ABA protocol but questioned whether ABA members are being compliant with it in practice.
Correction: A previous version of this article stated that the listed Mr Scott “may” refer to AMP head of advice quality and compliance Chris Scott. The reference has subsequently been removed. An AMP spokesperson was unable to confirm or deny whether the Mr Scott mentioned by Ms Orr is in fact Chris Scott.
It also mistakenly stated that Ms Britt was “unable to recall” whether a request had been made by Dover. It has subsequently been amended to clarify that Ms Britt told the the commission that “AMP has been unable to find evidence of the request”, which is a more accurate description of the transcript.
So already the commission has revealed 3 serial offenders mysteriously turning up as Dover advises, I myself personally know of at least 2 others, what are the odds?? It was all just a spot of bad luck commissioner, that and those nasty banks wouldn’t tell us anything, oh wait, they did phone us on a few occasions, confirm compliance investigations underway and refused to give any positive or negative feedback……. we just notched that up as a positive reference anyway….. and what do you know, these guys whom once stood accused of clear professional and ethical misconduct are now model professionals!
Has the RC or anyone else shown evidence of those advisers behaving inappropriately while at Dover?
I know nothing of these specific advisers, but there are some advisers who let their professional standards lapse due to the pressures applied within a vertically integrated product company, but are perfectly fine in an environment where those pressures are removed.
[quote=Shoot Dovers with shotguns]Dova is the best dealer group of last resort – they make AMP look like the most professional AFSL around with lots of integrity. They use recruitment tactics which reflect the worst practices in the industry and employ incompetent staff who are happy to bend the rules. None of their advisers are set up as Tax Financial Advisers with the TPB via a vetting loophole and aggressively promote this vetting which takes a month to come back and done out of Vietnam by untrained consultants. Worse yet – any group which says join us for free for one year is dodgy! [/quote]
Sounds like another unhappy competitor with an EU lingering over their heads….snap!
“Best Dealer Group” is the only accurate comment you’ve made nuffty.
[quote=Shoot Dovers with shotguns]Dova is the best dealer group of last resort – they make AMP look like the most professional AFSL around with lots of integrity. They use recruitment tactics which reflect the worst practices in the industry and employ incompetent staff who are happy to bend the rules. None of their advisers are set up as Tax Financial Advisers with the TPB via a vetting loophole and aggressively promote this vetting which takes a month to come back and done out of Vietnam by untrained consultants. Worse yet – any group which says join us for free for one year is dodgy! [/quote]
I think you’d better check your facts before commenting.
1) Yes we are Tax Financial Advisers, directly with TPB – not sure what you’re referring to with a vetting loophole but I am definitely paying a fee to the TPB…
2) Not sure what you’re referring to about free for a year either? The licence fee is paid 12 months in arrears…
i can’t wait till dover take the stand. show them Jerry, or Barry how compliance is done
alright big boys, you are all about to see how dover does things right
the most compliant licensee in the market
I don’t know what he/she was referring to either. Possibly an Adviser, who woke each morning, looked at themselves in the mirror and headed into work quite prepared to “sell their soul” in the name of personal enrichment at the expense of others. In other words either a Bank employed Adviser or an aligned Adviser.
Why would an individual be specifically named in an artical when the journalists are not 100% certain it is the right person?
Egregious journalism
Dova is the best dealer group of last resort – they make AMP look like the most professional AFSL around with lots of integrity. They use recruitment tactics which reflect the worst practices in the industry and employ incompetent staff who are happy to bend the rules. None of their advisers are set up as Tax Financial Advisers with the TPB via a vetting loophole and aggressively promote this vetting which takes a month to come back and done out of Vietnam by untrained consultants. Worse yet – any group which says join us for free for one year is dodgy!
12 month payment terms is not the same as free. Dover offers 12 month payment terms and does not offer a ‘free’ year.
You also claim the team that vet advice documents are ‘untrained’. This directly conflicts their website which states: “We have 12 staff in our Melbourne office alone dedicated to the review of statements of advice. Each of these staff holds a law degree and other relevant qualifications.”
Perhaps you would like to provide the basis for your so far unsubstantiated allegations.
It’s all well, and justified, to slam the banks and AMP but the same issues being raised in the RC also happen in the independent licensees. It’s just that the indepenedents are somewhat below the radar at the moment.
But on this article, under AMP’s center of excellence ( no joke, that’s what they refer to their services model as ) none men of their licensees have any discretion on how they manage compliance, auditing, references etc. Everything is handled from the mothership. I make this comment because it’s just proof about where fish rot from.
Yes independent corporatised afsl’s such as Synchron are flying below the radar at the moment, and they should be next on the RC list
I agree – non-institutional licencees such as synchron should be the next to be examined. Their history of advice and compliance quality often mirrors those of their bigger counterparts
perhaps Authorised Reps should “own” the internal advice audits by the AFSL and be able to provide such reports to their new AFSL as evidence of compliant behaviour (or not).
Dova is da best deala group
Professional too I see
Lol, well if you are going to licence financial criminals, Why not branch out into the actual gansta market as well? Welcome to the site Tupac…..
All very well for people to bemoan poor reference checking processes. But are references really worth anything anyway?
There’s plenty of bank advisers who would be regarded as “troublemakers” and “poor performers” in their roles, because they didn’t write enough business into bank products. If these people left and a reference was requested, it is unlikely to be a good one. Should those planners be even further hampered in their professional careers by misplaced faith in reference checking?