AMP announced yesterday the resignations of chair Catherine Brenner and general counsel Brian Salter, following revelations at the royal commission on Friday that the company could be exposed to criminal charges.
Monday’s resignations followed the announcement on 20 April of the immediate resignation of AMP chief executive Craig Meller, who was due to leave the company at the end of 2018.
Board member Mike Wilkins has been appointed as executive chairman (encompassing both the chair and CEO roles) on an interim basis while AMP looks to replace both positions.
Speaking to ifa, Australian Shareholders Association (ASA) company monitor chair Allan Goldin said Ms Brenner’s resignation was “very good” but it should have happened before Monday.
AMP’s announcement that it will cut all director’s fees by 25 per cent for the rest of calendar 2018 is little more than a “nice little slap on the hand”, Mr Goldin said.
With AMP’s annual general meeting coming up on 10 May in Melbourne, the ASA will be recommending shareholders vote against the re-appointments of Holly Kramer and Vanessa Wallace, Mr Goldin said – as well as the appointment of a third director, Andrew Harmos.
The board of AMP should be “cleared out” completely over the next two to three years – and that includes Mike Wilkins, who Mr Goldins pointed has been the chairman of AMP’s risk committee since May 2017.
Shareholders should also vote against the AMP’s remuneration report, Mr Goldin said – something the ASA would be opposed to even without the revelations at the royal commission.
There should also be clawbacks of bonuses for AMP executives who were directly responsible for the “wrong behaviour” that has been exposed throughout the royal commission hearings, he said.
The Australian Council of Superannuation Investors (ACSI), which represents institutional AMP investors, described Ms Brenner’s resignation as a “belated gesture of accountability” for misconduct revealed at the royal commission – adding that “more is needed”.
“Clearly a lot of change is required at the company. This must extend to further board renewal. Investors need reassurance that the poor culture and governance practices exposed at the royal commission have been banished and new perspectives installed,” said ACSI chief executive Louise Davidson.
ACSI expects more “financial consequences” for AMP executives as problems with AMP’s advice division continue to be uncovered, Ms Davidson said.
“It is appropriate that the board claw back bonuses that have been paid in the past to executives involved in the misconduct,” she said.
ACSI said it would “review our existing recommendations to members on the remaining AMP directors once we have had a chance to discuss today’s developments with the company.”
“Our recommendation to members to vote against the remuneration report at the upcoming AMP annual general meeting will remain unchanged,” said ACSI.
AMP has a long history of charging big fees and not being at the top of quality Financial Advice. I am not surprised at the revelations of the Royal Commission. I think all Planners knew that there were problems at AMP and all the big players starting with A and ending with W or even Z.
Who is ‘fit and proper’ at AMP? Prudential standard APS520 demands only those that are’ fit and proper’ can be a board member or hold a senior executive post. AMP need to sort the ‘oats’ from the ‘chaff’ before it can move on.
Hello FPA. AMP Financial Planning is one of your members…are you going to do anything?
The media frenzy is making the situation worse than it i really. Take some deep breaths as the sky is not falling. The Royal Commission is a witch hunt and boy is it feeding the legal profession. Granted there have been some exposures but in reality insignificant. Sam Henderson gave poor advice and went wrong way to access a prospect’s superannuation which could have easily done with a third party authority. A lot of good people have been humiliated and have had careers burned in the interim. The repercussions will be against the innocent majority of financial planners. We are soft touch and defenceless. Senior management of financial institutions should not be receiving their huge bonuses especially when they are paid substantial fixed salaries. This could prevent the greed is good factor
Why do advisers not want to take responsibility for what actions they take? The bad behaviour is not islotaed to the big bank advisers. Sam Henderson is an independent and uses managed accounts which are being common place in IFA land. I’m tipping the commission could call another 10 independent advisers who use managed accounts and find similar conflicted advice.
Sam Henderson is not an independent. Any advisory practice that uses inhouse product is vertically integrated, regardless of their size. This includes accountants who recommend inhouse administered SMSFs.
I do worry that the AMP clean out will end up throwing the baby out with the bathwater. Mike Wilkins is a case in point,. unless there is damning evidence of incompetence or mismanagement by him, i would have seen him as a logical successor to the role. BUT i dont have inside knowledge of such things.