The number of advisers that are eager to leave AMP were it not for restrictions and financial penalties may be in the “hundreds”, says an adviser within the network.
Reflecting on the news that AMP’s various dealer groups have each suffered a decline in adviser numbers, a longstanding authorised representative of AMP Financial Planning said the momentum would be even more advanced if the institution didn’t make exiting so difficult.
The practice principal, who spoke to ifa on condition of anonymity, said he has considered leaving his current AMP-owned licensee, but that to do so would leave his clients and business in a vulnerable position.
“Due to initial contracts AMP Financial Planning owns the clients, including ones I have brought in over the years,” the principal explained.
“Sure this should be considered before signing up, but when starting out you are at the mercy of anyone who is willing to assist.”
In order to leave AMP FP, the adviser says he faces three undesirable options.
The first is to exercise AMP’s Buyer of Last Resort (BOLR) offer, which would see him “written out of the industry for three years”, an option that is “not ideal as most people like to have an income”.
The second would be to sell the book to someone else within the licensee, which he says is “unethical” as he would be offloading clients he had every intention of coaxing back.
And the third is to take out a loan to pay a penalty, “surrender the clients to AMP” for a period but remain in the industry, meaning he would be free to leave but “with no clients and a six-figure debt”.
“There are dozens, maybe hundreds, of aligned planners who cannot leave due to these constraints,” he alleged.
“If the industry is truly going to change, surely the planner having a choice of independent, aligned or non-aligned is a good place to start.”
Another principal, speaking to ifa on the same condition, says he is in the process of trying to bring a current AMP adviser over to his own AFSL, but is experiencing similar problems.
“Overcoming the onerous dealer lock-ins, conflicts of interest and largesse [such as] easy money, percentage-based fees, insurance commissions, BOLR at above market value etc, is a huge hurdle,” the adviser said.
“BOLR is keeping a lot of people [from moving]. They are hamstrung. You have to be really brave to leave and sure you can recover.
“Rules have changed and there needs to be a phase-out of BOLR. I think it needs to go completely.”
The comments follow the revelation that nearly 600 individual advisers left the AMP network in the past year.
In response to a request for comment from ifa, an AMP spokespersons said: "The BOLR service has always been designed to be an option of last resort for advisers who are looking to retire and exit the industry."
"While the BOLR service is suitable for some advisers, the majority choose to transfer their client registers to other adviser firms within the network which we fully support."
This story has been amended to clarify that nearly 600 advisers left AMP, not more.