The Sydney-based firm lodged the suit on 17 September against AMP and its subsidiary, Charter Financial Planning, for alleged breach of contract, unlawful interference with contractual relations and unconscionable conduct.
According to the statement of claim, as reported by the Australian Financial Review, Centurion is holding AMP, its former financial services licensee, accountable for a failed buyout.
Centurion has alleged its founder and managing director, William Nelson, who worked as a business development manager for the wealth giant between 2011 and 2015, was approved a $848,586 loan from AMP in July 2015 to buy a financial planning firm as an authorised representative of AMP’s Charter licensee, under firm buyout rules.
Following news that AMP was restructuring its advice business in August 2019 and binning the previously instated buyout arrangements — which resulted in a class action against the company — Centurion decided to trigger the buyout before 6 November 2019 (the date the new calculations were said to kick in) after receiving a valuation of $955,471.39.
However, according to Centurion, not long after, in December 2019, AMP reached out with additions to the contract that were not originally agreed upon, including that AMP’s payment was subject to operational capacity and the completion of a fees-for-service review.
Several months later, on 2 July 2020, Charter calculated a purchase price of $971,511.86 to be paid in two instalments, half at that time and the remainder 12 months later; however, according to the court document, Charter did not submit the July payment.
Centurion alleged that on 15 January 2021, Mr Nelson was emailed by an AMP manager offering a payment of $300,000. The significantly smaller sum was said to be due to the buyout option no longer applying as a result of delays caused by Mr Nelson.
While unable to establish contact with Centurion immediately, an AMP spokesperson told ifa that negotiations around Mr Nelson’s “retirement” are ongoing.
“We have been working closely with Mr Nelson following his decision to retire,” they said.
“As with any transaction, there are a number of steps that need to be taken before completion — we have provided ongoing support to the adviser to enable him to understand the necessary requirements and continue to fulfil his obligations to clients during this time.”
Just another example of AMP business practices… What a shameful, morally and ethically bankrupt organisation.
This is just the tip of the iceberg in terms of advisers suing AMP for breaches of contract…I know of at least two other cases. AMP has made it a business practice to renege on contractual obligations, knowing that very few advisers have the money or the fortitude to take them on legally. I wish Mr Nelson every luck, AMP will now start on expensive and diversionary legal tactics. However, if he persists, they will fold – if only through internal staff attrition!
Perhaps. But it’s very hard for dealer groups to breach potential contracts with their ARs when those contracts are so biased to the dealer group in the first place and allow the dealer group lots of scope to vary the terms unilaterally. Advisers are often shocked to find out the true nature of their contracts. Just because a lawyer has taken on the breach of contract case doesn’t necessarily mean the case is strong. Let’s see what happens.
BTW does anyone know what’s happening with the AMPFP BOLR class action? Haven’t seen anything reported, and it’s been going for a while.
I’m referring to individually negotiated equity partner agreements, not licensee agreements. Not all equity partners are getting what they expected, after years of hard work and glowing compliance reports, based on their contracts, for which they obtained legal advice.
Interesting …..[i]that AMP’s payment was subject to operational capacity and the completion of a fees-for-service review. Wasn’t it AMP’s practice to collect collect ‘[b]fees for no service[/b]’? [/i] Wasn’t Willie (Centurion) just following AMP’s practices when he was Licensed to AMP at their approval? Surely, AMP can’t change the terms and conditions retrospectively because they were deemed not to be lawful by the RC. AMP can’t have it both ways….do what we say until we are caught, then it’s all bets off???
Once again AMP taking internal policies and treating them as if they were law
Yep, all dealer groups do this. They also lie about and say it is the law, even though it’s not.
However dealer groups don’t actually need the law on their side to make up their own rules willy nilly and impose them on advisers. In most cases the Authorised Rep contract the adviser signed when they joined gives the dealer group the right to do so. It’s yet another reason why the dealer group licensing model is so flawed.
Most large Companies try to protect their business reputation to attract new employees, staff and customers, normally try to settle these claims as quickly and quietly as possible. This is going to be nasty, as AMP no longer has reputational damage to protect! What adviser in their right mind would seek to be Licensed to AMP after all that has unfolded in the last 5 years! Good luck Willie. You know what you are dealing with, as has been well documented and exposed in the past. If you are in any doubt, just ask the AMP Advisers Association.
AMP and AMP advisers have never really cared about the reputation of the wider Advice Community. That is evidence by the amount of Government intervention….I’m sure that every adviser in Australia is now getting clients to sign the “new” Fee Disclosure forms and when explaining why… the words AMP and AMP advisers are mentioned.
That’s the problem….AMP hasn’t cared about it’s reputation for many years because as a Mutual it didn’t have to because it wasn’t accountable to shareholders. Unfortunately, when it became a PLC, no one told them that they were now accountable to ‘new’ owners! If you check out their share price history since listing, AMP mightn’t care how they behave but the shareholders certainly do and they have voted with their money…..or what’s left of it!
Mr Nelsons adviser registration was cancelled in January 2021. How does Mr Nelson fulfill his obligations to his former clienrs AMP?
Willie Nelson – sticking it to “the man” once again. Go Willie!