Ampfpa chief executive Neil Macdonald said that the wealth giant was contractually obliged to consult with the association over changes to the terms.
“AMP is contractually obliged to consult with us over changes to the terms and also to give our members 13 months’ notice of any change that will have a detrimental effect on them. AMP has done neither,” he said.
Mr Macdonald said the MP changing market value of the BOLR to 2.5 times from four times was disingenuous.
“Advisers had to pay four times recurring revenue to buy into the right to service an AMP client book. That was the price set by AMP. It was never a market value,” he said.
Mr Macdonald said that advisers did not own their client book and would never have paid four times without AMP’s promise to pay four times when the adviser retired.
“This was AMP’s mechanism to attract and retain advisers long term. But now, AMP is wanting to keep the four times entry price for itself and only pay back 2.5 times,” he said.
The wealth giant has already broken trust with its customers said Mr Macdonald and now it was breaking it within its own people.
“The reduction of the multiple applied under the BOLR terms is potentially disastrous to many advisers, particularly those who have given notice but have not yet been bought out,” he said.
Advisers who were on the brink of retirement would now be forced on Centrelink benefits when they exit as a result of the change said Mr Macdonald.
Many advisers had purchased the books through loans and repaying them would be extremely difficult for some, said Mr Macdonald.
He added: “We are concerned about the potentially devastating flow-on effect of the financial loss in terms of the mental health of advisers, their families, and their staff, as well as the impact on their clients. What will happen to the clients of the advisers that AMP forces to move on, advisers who cannot, due to AMP-imposed restraints of trade, work in the financial services industry for at least three years?”
Mr Macdonald was also concerned by the wealth giant’s intention to divest itself of advice practices and introduce digital solutions which would mean consumers would no longer be able to source locally based personal advice tailored to their needs.
“In our opinion this would reintroduce a sales culture and that is a very poor outcome indeed for consumers and a very poor outcome for Australia,” said Mr Macdonald.
Neil and the team have done very little over the last 5 years. They did nothing following the Royal Commission and they have done nothing since 8th of August when all of this was announced. Does anyone want to guess what they will do next?
Alex Wade, Francesco whatever his name is won’t be around in 2 years time. They don’t care, they want the bug bucks and that’s it.
Come on hero Neil and the board members at ampfpa, Put your money where your mouths are.
AMP advisers should leave the ampfpa has the horse has bolted and Neil and the Board have done nothing in the past year other than swan around at conferences. Maybe we should join the ARA or Charter association and it seems they get noticed. Too little, too late.
What if AMP advisers all exercised BOLR at the same time..? That would be fun for management to deal with. Might be worth the threat..?
The association was done very little to support advisers with BOLR against AMP. It’s time to stand up and take a class action or go home ampfpa.
AMP a law unto themselves.
[quote=Chris Tobin]FPA anywhere? [/quote]
dey are working on dere rem package
The brand has been damaged beyond repair now regardless of what they think their future strategy looks like
Affected advisers will need to sue AMP. Everyone else is!
AMPFPA asleep at the wheel guys, come on you should have been proactive and fighting on behalf of the advisors… Isn’t that your job?
It’s obvious what is happening here.
Total BOLR liability about $2bn
AMP want to reduce adviser network by 50%
AMP would need to pay $1bn to advisers
Reduce BOLR from 4 times to 2.5 times
AMP now need to pay $625m
AMP save $375m
Dollars not lives are what matters to AMP
now no one saw that coming – AMP Loyalty to the fore –
AMP have not learnt a thing. At a time when they need to rebuild trust they savage the BOLR terms of the advisers that support them. The clear message is you cannot trust us as we will do what suits us. They also do not understand that the adviser relationship with the client is key to their survival. If they understood that they would prioritise their relationship with advisers. Clearly they are not doing this under the delusion that they will attract clients directly. Seriously after the exposure of all their indiscretions by the RC they believe customers will come directly too them. Who is going to take the calls and help clients through market volatility,low interest rates,Centrelink and retirement planning ?? How can AMP survive without distribution and client service ? Why would a buyer pay anything for AMP. Simply contact the advisers and offer a proposition to move clients so AMP get nothing. That is what the Adviser Board should be negotiating.
If I did this to a client it would be unconscionable conduct. Tell’em their dreaming.. looks like a sequel to the Castle is brewing
BOLR is a Ponzi scheme subsidized by planners with less than 15 yrs tenure for the benefit of a bunch of older inefficient planners who should have been out of the industry years ago. The older blokes get their BOLR payment upfront however planners with a shorter tenure get 50% upfront and the rest after 12 months. No doubt the AMPFPA will waste the resources of all planners in order the benefit the few old blokes whilst doing the wrong thing by the rest of us yet again.
Last straw for me. I’m an IFA, and I’ll never be using amp again, and I’m not alone.
Would get less than 2.5 on the open market
FPA anywhere?
just imagine if a planner dis this to a client… Unconscionable Conduct?!
Surely if AMP is devaluing the BOLR rate by 37.5% they should also be refunding 37.5% of client book purchases made by advisers at the BOLR rate?
Very odd strategy from AMP. Their brand has become toxic to consumers, and their only chance for survival is if advisers guide consumers to make decisions based on product features rather than brand. (AMP’s newer products are actually pretty good. Much better than many union funds.)
Yet AMP has decided to trash and alienate most of the adviser channel, and adopt a direct to market approach instead? Hard to see it working.
The association has had plenty of time to take action so that the board would take them seriously. To little to late
I don’t deal with AMP in my practice and, reading this article, I’m so very glad I don’t, What a nightmare! If this article is true and accurate then AMP management should be abjectly ashamed and be forced to resign tomorrow. No bonuses paid. This is typical [b]corporate bullying behaviour[/b][b][/b] and should not be tolerated. AMP adviser should ALL call a meeting tomorrow and show solidarity against this and get some press coverage about AMP cheating/breaking contractual agreements while they’re at it. Disgusting behaviour by AMP management. The AMP founders would roll in their graves with this nonsense. Good luck AMP planners, band together – it is your best hope guys. Have some of the biggest writers lead the charge to get their attention quicker. Just do it.
Re MyTops comments below. Stop being a troll
If a plnr did this to a client it would be unconsciounal conduct… say no more
I think it’s clear that AMP is restructuring so it can sell off the bits that still have some value. It’s not about surviving, it’s about consolidating saleable assets. Unfortunately advisors are collateral damage in the process. The name AMP will be gone in 2 years time.
Typical. Planners get screwed big time. Yet our CEO gets his Rem and bonus package adjusted because of the falling share price was out of his control. What about the planners that paid 4 times overnight now get a 37% reduction in value? The bank still wants loans paid back I am sure not at 63%. There share holders get no dividends. They have learnt nothing from the RC. I hope the ampfpa gets support from other aligned associations HAA & ARA or you will be next. This will destroy people. Remember most wrong doings uncovered in RC were board, Meller and co not the planners.
How is it that and adviser can lose millions in BOLR value yet the CEO can restructure his performance hurdles down from a $3.44 share price to $2.45. Talk about a transfer of Wealth. BTW AMP share price today $1.93 MMm guess who’s nearly in the money. The advisers should all tell AMP to stick it
Not only amp reps arenaffected all advisors will go under they way there being treated .they will lose there homes possibly large income loss and possibly staff and the employment will rise with staff from insurance compananies going on dole this as not been looked into proberly
AMP needs to carefully reconsider their plans and ensure they look after those who can still add value and give AMP a future.. these are the hard working planners who have tirelessly worked to protect AMP’s name throughout the difficult times. Without them, don’t even bother. Get your priorities right, AMP.. you may then stand a chance of not only surviving but thriving.
grandfathered fees with no reviews etc are disappearing.This is what AMP and advisers got fat on.
A client summed it up as he requested we move his funds out of AMP Ethics play a big part in my life
AMP hasn’t been an ethical company in the past and I see no change
I believe AMP is down sizing. Rather than using strength in products and processes to put them back on the map AMP is putting the shareholder first to reduce costs.
In the past AMP did the wrong thing by their clients. It looks like they are now doing the same to their own staff.
and If in their down sizing they remove good people then that puts my returns in jeopardy and I believe it is time to ask the questions and to move.
Rod m
AMP are trying to have their cake and eat it too. The only reason planners gave them corporate ownership was because of the BOLR terms and now they reduce it to 2.5 times and keep corporate ownership. Bring on the class actions.
Seriously who is surprised by the BOLR change, its actually amazing that AMP have persisted with it, its been delusional for sometime with market rates at 2 to 2.5 times and AMP offer 4.5. Is nothing learnt about market forces when giving advice around equities and bonds ?
First class action by the consumer, and then class action by the advisor.
There would be no value in the stock at 50 cents.
This is a fight that has to be had right now based on a matter of principle, contract and fairness.
AMP are happy to accept the loyalty and support to build their business from the advisers and when the survival of their own brand is at stake they are willing to sacrifice those who have stuck with them and who have been the fabric of the generation of wealth management profits for years.
AMP have now highlighted what a ruthless and savage organisation it is.
Is it not entirely contradictory that advisers are being forced to complete training and exams on ethics simply to be allowed to continue to practice when the very organisation they are committed to employs this process.
There is no loyalty whatsoever from AMP to their advisers who are already vulnerable and hurting significantly.
They see it as nothing more than an opportunity to waste them in the name of survival and bottom line.
What an absolute disgrace.
All AMP Advisers should be joining the ARC Fund too, as a backup plan.
Nothings Changed since 1991 has it, AMP is still treating their advisers as employees but telling them that they are self employed.
Management continues to get paid hefty incomes and play by their own new rules, but look to destroy those who have supported them through good and bad times.
Based on this type of action, who would want to be an AMP adviser!
The once-mighty proud Australian “Titanic” is adrift in a quagmire and sinking into an abyss of deep dark gloom.
The AMPFPA has done absolutely nothing for a year and a half and now the horse has bolted. Dream on cinderella.
BOOM! Bye Bye AMP. Did you ever have BOLR on your balance sheet as a liability/ What is the Capital Raising really for? Legal costs?
AMP is totally stuffed, it will be buried with no honours by 2020.
Such an unethical, dishonest and disreputable entity that ASIC turns a blind eye to…what is going on?