Senator Deborah O’Neill has demanded ASIC investigate AMP’s decision to reduce its buyer of last resort (BOLR), saying it has “drastically devalued” the businesses of many advisers.
In a letter to ASIC chairman James Shipton, Ms O’Neill expressed concern about AMP’s decision to reduce its BOLR guaranteed value from four times annual revenue to 2.5 times annual revenue and asked that ASIC “immediately commence an investigation into this matter”.
“The decision has drastically devalued the businesses of many financial advisors,” Ms O’Neill wrote. “This was also applied retroactively to many planners who had purchased client books in good faith with this guarantee.”
AMP also issued notices of termination to an estimated 250 planners that were deemed “lower profitability”, forcing them to sell their business for less than one-tenth of what they were worth before the changes. The Australian Small Business and Family Enterprise Ombudsman has received over a hundred complaints from advisers affiliated with AMP due to those actions.
Ms O’Neill has requested that ASIC prepare a full report for the joint committee on corporations and financial services oversight hearings on 13 July.
Last year’s changes to the BOLR sparked a bloody war of words between AMP and its advisers as the wealth giant struggled to turn its reputation around in the aftermath of the shocking revelations of the royal commission.
“Placing an obsessive focus on shareholders ahead of clients is what got AMP into this mess in the first place,” an anonymous AMP adviser told ifa last year. “They’re doing it again. There is a pattern emerging that concerns me. But without clients they won’t have any shareholders.
“How can anyone possibly expect an AMP adviser who is being forced out and possibly facing the loss of his family home to sit in front of clients and provide calm, well-considered advice? How could a licensee expect its advisers to keep defending AMP when it is treating them so callously?”
AMP was not contacted for comment on this article.
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