In a statement on Wednesday, AMP confirmed that AMP Financial Planning (AMPFP) has filed a notice of appeal in relation to the judgment in the Federal Court of Australia which found that the wealth giant was not authorised to make immediate changes to its buyer of last resort scheme.
Back in July, the Federal Court of Australia found in favour of advisers in the class action filed against AMP’s subsidiary, AMPFP, in 2020, in relation to the wealth giant’s controversial decision to change its Buyer of Last Resort (BOLR) scheme.
Justice Mark Moshinsky ruled in favour of the class action group, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
At the time, AMP said in a filing to the ASX, that it would provide an update in due course.
And on Wednesday, the wealth giant confirmed it has filed a notice of appeal. It also said it has agreed to engage in mediation, which will take place later this year.
Commenting on the latest development, AMP’s group executive, advice, Matt Lawler said: “While we believe we have grounds on which to appeal, we also recognise the ongoing impact the proceedings are having on practices, with whom we’ve worked hard to rebuild strong and trusted relationships.
“We value these relationships and that’s why we are fully committed to the upcoming mediation process in November 2023, with the aim of reaching agreement on an outcome that allows us to put this behind us.”
AMP announced in July 2020 that a class action had been filed against its subsidiary AMP Financial Planning in the Federal Court of Australia.
The claim was brought by advisers who claimed the wealth giant failed to give them adequate notice before writing down their client book values under BOLR contracts.
Namely, the BOLR policy formed part of a contractual relationship between AMPFP and the financial planning practices in its network, which consisted of 542 practices by the time the changes were made.
The policy gave practices the opportunity to sell back their register rights to AMPFP on 12 months’ notice, which prior to the August 2019 changes, were valued at four times its ongoing revenue.
On 8 August 2019, AMPFP changed the multiple from four times to 2.5 times in respect of ongoing revenue.
Its grandfather revenue plan was also changed from four times to 1.42 times, with a further plan to continue reducing the figure per month until it reached zero by January 2021.
Back in 2020, a spokesperson for AMP told ifa the group was confident changes made to the BOLR contracts had followed the letter of the law as well as being “in the long-term interests of our clients and advisers”.
“The financial advice industry has transformed dramatically in the past few years, including the removal of grandfathered commissions, new mandatory education standards and higher advice standards,” the spokesperson said.
“AMP has made difficult but necessary decisions to ensure we adapt to the new environment and continue to have a strong, viable advice business for clients,” the spokesperson added. “We recognise the changes are challenging for many in our adviser network, and we’re providing support to our advisers to help them manage the transition, including those who support the class action.”
Neil McDonald and co – please for the sake of the long standing advisers, do not rollover or give an inch to AMPs dirty tactics, especially in the mediation. No doubt they’re trying to strike a deal to limit the damage for the BoLR bill. Please do not give into there demands. They have shown and continue to show they’re not trusted. To be honest, I wouldn’t trust AMP tying my shoe laces let alone in a mediation session!
They should appeal it! Yes, SOME advisers retirement plans may have been affected but the terms offered under the old BOLR arrangements were uncommercial for years. Most of the blame has to sit with the old AMP management who fed their greed but they allowed themselves to be bullied by the larger AMP advisers firms. In basic terms BOLR, which should have been reigned in years ago, was manageable but the arbitraging was unbelievable. And the recruiters knew they could use “arbitraging” to increase advisers numbers and the AMP used them to retain advisers.
Its was a disgraceful scheme abused by both AMP and their advisers.
Once again AMP confirms the toxic nature of it’s business model. Vote with your feet and exit this spiteful organization and never use an AMP product again.
The advisers that AMP booted a few years ago went through remediation with AMP and we all know how that went.
AMP is a case study in how NOT to be ethical.
Whats there to mediate. You have ruined peoples lives, ripped out the heart of the advisors who served with the utmost respect to their clients and you ripped out the carpet from underneath us.
AMP should be ashamed of themselves. How can you repair YOUR damage to people who committed their lives in there roll as an AMPFP Authorised Reps.