AMP has responded to senator Deborah O’Neill’s call for an investigation into changes to its buyer of last resort arrangements, saying the decision was “difficult but necessary”.
AMP has defended its decision to change the BOLR arrangements amid demands by Labor senator Deborah O’Neill that ASIC immediately commence an investigation into the matter.
“The decision to reset AMP’s commercial terms was difficult but necessary given the recent changes to legislation following the royal commission resulting in significant economic changes and disruption across the industry,” a spokesperson for AMP told ifa. “This includes the removal of grandfathered commissions, new mandatory education standards, and new regulations around advice.
“Throughout the process AMP has consulted closely with affected advisers, the industry associations and the Small Business Ombudsman, including participating in several mediation sessions with advisers. We are providing support to advisers to help them manage the BOLR changes and make an informed decision for their future.”
The spokesperson declined to comment on whether AMP had been contacted by ASIC as part of an investigation, but said that it had participated in mediation sessions with more than 30 advice practices to date.
Ms O’Neill slammed AMP’s decision last year to reduce its BOLR guaranteed value from four times annual revenue to 2.5 times annual revenue and said that the Small Business and Family Enterprise Ombudsman had received over a hundred complaints from advisers affiliated with AMP due to the changes.
“The decision has drastically devalued the businesses of many financial advisors,” Ms O’Neill said. “This was also applied retroactively to many planners who had purchased client books in good faith with this guarantee.”
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.
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