AMP hands final marching orders to terminated advisers

The notices of termination and revocation, seen by ifa, are understood to have been sent to between 30 and 40 advisers at the end of March, and state that “should the obligations of your exit pathway not be met by 23 June 2021, the authorised representative deed of agreement … between AMP and the practice will terminate”.

Obligations listed in the notice include transitioning ongoing service fee clients to annual agreements or switching client fees off by 31 March, providing all current and historic client files to AMP, completing BAU and look-back audits, repaying or refinancing AMP Practice Finance loans, signing a deed of release and issuing notification letters to clients.

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A spokesperson for AMP said the notices had been issued “following an extended period of engagement”.

“We have recently written to advisers who are in the process of leaving the network to finalise their arrangements with AMP,” the spokesperson said.

“We continue to keep The [AMP] Advisers Association informed and our transition management team has been in regular contact with each adviser, recognising the change is difficult and working on an individual basis to help them through the transition.

“This includes providing access to counselling and wellbeing services, and when applicable AMP Bank working with advisers to address their unique financial circumstances.”

Neil Macdonald, chief executive of The Advisers Association, said the notices had primarily been delivered to planners who had yet to take any firm action on an exit pathway out of AMP since receiving their termination notice in 2019, or those who were well progressed and in the process of finalising their exit.

“It seems to be two groups – to encourage people who haven’t done anything, and to put a full stop at the end of the process for people who are on track to have exited by then anyway,” Mr Macdonald said.

“Having said that, it’s still a stressful event for most of the people left. We’ve said all along that the only solution we can see that gets the majority of people a reasonable outcome is the class action, but there will be a number of people that have got particular circumstances that will need to be dealt with on a one on one basis, which AMP keeps telling us they are.”

In December, former AMP adviser David Haseldine told the XY Adviser podcast that the wealth giant was pressuring advisers to sign exit contracts which would disqualify them from participating in the class action. 

AMP has since been ordered by the Federal Court to make clear in its communications with exiting advisers the consequences of them signing any such settlement deed.

However, Mr Macdonald said not all advisers would need to agree to release legal claims against AMP as part of their settlement terms.

“We know some people have got that clause and they are happy with the clause – an example is genuine retirees who early in the piece negotiated an outcome that they were happy with and decided it’s no skin off my nose to sign it,” he said. 

“Some will have signed it willingly and some will have signed it under duress. But if you get legal advice and your lawyer says ‘I wouldn’t sign that’, your lawyer would generally go back to AMP and say we’re not going to sign it because it’s not fair. I imagine it would be looked at upon its individual merits.”

Similarly, Mr Macdonald said individual advisers would have negotiated their own terms around outstanding practice finance loans to AMP Bank, with some given additional time to repay beyond June 2021.

“One of the challenges we’ve got is about 60 advisers went to a mediation process with the small business ombudsman – in that process it was confidential, so we don’t know what AMP has been doing about outstanding loans and how much they are,” he said. 

“Some people have been asked to repay, some may have been forgiven and some may be given terms like ‘you can leave but you’ve got to repay it by X number of years down the track’.”

Mr Macdonald said around 100 of the original 250 planners terminated by AMP in 2019 had still been negotiating an exit as of January 2021, but that the majority had left in the first quarter of the year.

“There have been a large number of planners exiting in the first quarter and a number leaving before 31 March – somewhere between 40-60 left in the first quarter,” he said.