At the round seven hearings of the Hayne royal commission on Wednesday, senior counsel assisting Michael Hodge asked acting AMP chief executive Mike Wilkins whether a client coming to AMP would have confidence that AMP will stand behind its advice.
After Mr Wilkins responded in the affirmative, Mr Hodge then asked whether the case of an AMP client still in remediation 17 years after being charged fees for no service might dent the confidence of potential new clients.
“Yes, but, as I explained yesterday, at that stage I don’t think we had a full appreciation of the size of the issue that we were facing,” Mr Wilkins responded.
“In terms of the subsequent provisions that we have put forward, I think we are facing into that problem and saying we will remediate those clients within three years. And I think that AMP is actually the first of the companies with a major aligned network to be able to actually make that statement.”
“Well, that’s within three years of 1 July 2018?” Mr Hodge asked.
“Yes,” Mr Wilkins said.
“So the possible maximum period has been shortened to about… 11 or 12 years?”
“Yes.”
Mr Wilkins noted the $460 million set aside to remediate aggrieved AMP clients for advice failures such as fees for no service.
Mr Hodge then noted it was “an extraordinary proposition” that a financial services entity of AMP’s size would withhold such an amount of money, yet clients can have confidence that, 12 to 17 years later, it would still have the capital backing to repay that money to them.
“Well, I think the clients should have confidence in a large financial institution. It might take us a while but ultimately we will do the right thing to remediate them,” Mr Wilkins said.
“It just seems like rather than having confidence that you will ultimately have the financial capacity to fix such an enormous problem, it would be preferable if it was possible to have confidence that the problem wouldn’t arise in the first place?” questioned Mr Hodge.
“I absolutely agree with you,” Mr Wilkins replied.
The AMP management book says; 1) Deny there is a problem 2) Blame the advisers when unaable to deny problems 3) Find a trumped up “compliance” issue with any dissenting advisers and terminate them.
Just like BT they should accept the fact their business model is finished. Close it down.
Love the way these hotshot lawyers are rubbing CEO noses in the s**t they have caused for clients over past decades. Possibly too little too late. Absolute crying shame no differentiation is being made between these creatures who made the rules that raped the client bank accounts and the good work done by diligent advisers looking after their cleints over those same decades. Lawyers and the media, generally, won’t go out of their way to give credit where it is due. This, sadly, is one of the many reasons around this whole tawdry affair that I and many other experienced advisers are leaving ASAP. Did I mention the 2 year clawback period – you know, the one that the life companies didn’t rally against that enriches the life company at the expense of advisers and clients? Yes, the one that plays havoc with business planning for an adviser small business. No? . . . oh well, remind me to one day. . .
It’s looking pretty glum for AMP with a separation of advice looking more than a 50/50 chance. They seem pretty keen to keep it now and no doubt prepared to say anything. Pretty easy to say one thing in 2018 and five years later do another.
And I thought my wife was stubborn. These guys are kidding themselves if they believe the AMP model isn’t broken.
Have a Industry fund, they will refer you to MeBank. Industry fund charge every single client intra fund advice and is hidden as an admin fee and if you use this service or not this is called vertically-integrated business same same but different #CompareThePairButWeDon’tCompareAnything
The advice model is changing. The likes of AMP will provide product, without the tied agency of the past. BOLR has to be a massive concern!
AMP, IOOF, and MLC are critically dependent on vertically integrated advice for their survival. They have average products, and minimal support from advisers they don’t own or control. BT and CFS are far better positioned.
Sure they do (back their advice model) while they feverishly work on Robo behind the scenes to lessen the impact of adviser defections. More classic deflection and delaying to come.
AMP advisers are not being lead by anyone . The bulk of the criminality points to management, not practitioners.
The issue isn’t AMP management if you ask AMP management. The senior managers lie to ASIC and it is apparently the advisers fault.
Methinks Hayne’s is out to bring ruin and instability to our largest financial institutions, which will then bleed down into the economy and unto everyone (except these parasitic automaton public servants)
you are being polite… I would use ANNIHALATE… there can be no good when this happens.. it’s when it hits jobs and the economy when they might wake up