ASBFEO Kate Carnell told ifa the group had referred 63 BOLR cases to mediation out of more than 100 complaints received from former AMP advisers.
Of these, 18 cases had settled, 25 had been withdrawn and five had failed to reach a satisfactory settlement, while 15 were still in progress.
Ms Carnell said a number of advisers had also opted to “wait and see” around the results of other advisers’ mediations before going through the process themselves.
“Some of the 72 that didn’t go to mediation were going to see if the people who did go to mediation [got] deals that warranted the time, effort and anguish,” Ms Carnell said.
“It’s a process that is very user friendly but I think some of them said ‘we’ll wait and see’ and others have said we’re going to accept this and get on with our lives, because it’s all too horrible.”
Ms Carnell said AMP’s write-down of adviser businesses was “heartbreaking” and the contract terms agreed to by advisers would have been in breach of unfair contracts legislation had they been executed at a later date.
“The unfair contract terms legislation was [introduced in] 2017, so it only applies to contacts that were signed after that and many of these guys have been advisers a long time,” she said.
“What AMP had in those contracts [was] that they could change them – if there was a legislative change, fine, but also if there was problem with their business, or a financial issue, things that encompass just about anything.
“It’s a lesson to everybody to read the contract, but for these financial planners, they were working with AMP for 15 to 20 years, and I think they just thought they were part of the AMP family. It turned out that they weren’t.”
Ms Carnell said ASBFEO had briefed both Assistant Minister for Superannuation, Financial Services and Fintech Jane Hume, and Minister for Employment, Skills and Small Business Michaelia Cash on the issue, which was “of public interest”.
“I wish we had the capacity to push this harder, because it shows the dilemma of having contracts that are fundamentally unfair, that allow one side to change the terms and conditions without the agreement of the other side,” she said.
“These people are just small businesses that were operating with AMP contracts and products, they were audited by AMP regularly and they were doing everything that AMP told them to do.
“Fundamentally, they are picking up the tab for the fact that AMP had problems with the royal commission and was rightly found to be behaving not in line with community expectations.”
Editor’s note: Comments below this article may discuss suicide. If this raises any emotional or psychological issues for you, you can utilise the below resources:
Lifeline, 13 11 14, www.lifeline.org.au
Suicide Call Back Service, 1300 659 467, www.suicidecallbackservice.org.au
MensLine Australia, 1300 78 99 78, www.mensline.org.au
How do I compete with an adviser that can get an independent survey that costs $8,000 completed for free, (paid for by AMP) than wins an AMP in-house award based on that survey, and funds under management and revenue, who then proceeds to call himself the “Adviser of the Year.” and keeps calling himself that for the last 3 years, whilst referring to his “register”. Gets his advertising and business running costs paid for or subsidized by AMP and makes no reference to AMP, whatsoever. And this adviser then competes directly with me, and you want me to be sympathetic. Don’t get me started on over regulation. Give me a break AMP advisers. It’s a cultural thing from the top top the bottom and you guys all got bitten and you’re still expecting the blood from your customers stone.
You missed the point – this has nothing to do with AMP and everything to do with bullying tactics.
It’s more so about right or wrong. One group of individuals with low morals, being attracted to another much larger group with low morals and expecting some type of justice and sympathy from the wider population.
AMP are heartless and unconscionable, always have been. Don’t write their business in any shape or form (wealth, platform, mortgages). Boycott them and let them suffer.
That’s easy given AMP relied on a sales force to distribute their products and they’re culling them. In 20 years of being an Adviser I haven’t ever met anyone outside AMP going out of their way and recommending AMP products. After all the cost of BOLR was built into products. They’re relying on call centres now.
@ wonder dog. Yet another client seen in a crappy AMP product paying 2.73% ongoing MER with a 10 year performance in the last quartile and marginally bettter than cash. You guys don’t even have customers. You’ve got something referred to as a Register that your suck the blood out of for four years before handing back. Usually at least 1,000 clients per adviser. Given the amount of over regulation, I have little sympathy now.
AMP advisers have used far more than just AMP product.
What…. NORTH ?
I feel this is quite multi-faceted.
Should AMP honor contracts, yes absolutely.
Do I feel bad for any adviser that had clients in their horrendously outdated, expensive and underperforming products? No.
Any adviser with 1,000+ clients wasn’t servicing their clients anyways so I cant feel bad for them. As you say its a ‘register’… That’s not exclusive to AMP though.
Just because AMP can doesn’t mean that they should destroy the lives of small businesses.
It is abhorrent or unethical behavior from AMP.
Unfortunately more people I know in the situation with AMPFP have accepted their fate. It is hard to individually argue against a publicly listed company which has no ethics.
These institutions need to be held to account. They feed off each other for their moral courage.
I have never, ever seen an editorial comment like this in an article:
“Editor’s note: Comments below this article may discuss suicide. If this raises any emotional or psychological issues for you, you can utilise the below resources:”
I agree with the editor. This is serious.
Its no better at IOOF; they refuse to let you sell or take your client book externally, your are then forced to sell it internally (where there are no buyers) and then eventually buy it off you under their “terms” at a significantly reduced BOLR price because ‘there are no buyers’.
Isn’t AMP allowing advisers take their clients elsewhere now, as part of the trade off for reduced BOLR?
In that case, IOOF are worse than AMP?
Got to love statistics…
Withdrawn means didn’t want to waste time proceeding as one party wasn’t negotiating.
Settled means adviser was too emotionally damaged to proceed and decided to accept whatever just to end it.
Welll said
What I don’t fully understand legally is ‘917E Responsibility extends to loss or damage suffered by client The responsibility of a financial services licensee under this Division extends so as to make the licensee liable to the client in respect of any loss or damage suffered by the client as a result of the representative’s conduct.’ So why do AFSL’s even think they have a legal right to reclaim FFNS from the advisers?
I would think that the Adviser / Authorised Rep agreement would clearly state that the Adviser actually does the work for the fees and if there is any problem then AMP have the right to claw it back off the Adviser. they would be stupid not to have such an agreement.
You would think. But I’ve seen some of these and there is no mention. Simply if you follow Licensee Standards. And it was well known that a Letter of Offer for Review only, was sanctioned by Licensees as the correct standard. It is hard to see how they can now say, we erred on that guidance, oh and now we need some money back to make good to the clients, for over 10 years worth of fees.
And it’s not just BOLR purchases either. AMP seek to avoid or minimise what they pay on other business where they have a purchase agreement in place. It’s public record that there is legal action happening with some of these right now. Effectively, AMP do not care what is in ANY contract – they take a bullying approach where they just pay as little as what they reckon they can get away with, and figure if they get sued they can negotiate a settlement. Of course, most advisers can’t afford or are too intimidated to takea action, so AMP get away with it. It’s a cynical and cancerous culture in there and I totally believe the other writer’s account of the braggart – I’ve seen this approach also. Nothing has changed, they have learned ZERO from the RC. The 2 guys at the top have changed but it’s the same people in the middle that run this area.
That is all true but it was like this 5 and 10 years ago. A cushy lifestyle but very interestingly worded contracts and great difficulties to enforce your rights, if any, under those contracts. That was well known even outside AMP.
yes, i just left my AFSL and i have lodged a complaint to Carnell as well….
fee for no service it was as well….
its not just AMP being bastards. …
i got thrown under a bus too. …
As one of those who lodged a complaint but didn’t proceed to mediation on the basis that mediation only works if both parties are prepared to be reasonable and AMPFP hasn’t shown any indication that they are prepared to be reasonable I hope that the board and management of AMPFP feel the impact of karma in due course. I would wish for the company to suffer as well but realistically that would only punish shareholders and they have been punished enough already by AMP management over the years
YES, We need a class action! Come Slater Gordon or Mauice Blackburn, there is $1 billion in Grandfathered trail being switched off right now. You could get an easy win here. the Austrailian Solictor General told Bill Shorten that he could not attack GF commissions in FOFA as they are contracted property rights. WTF!? Why is it ok now Liberal government you pack of bastards!
I agree, i have a NAB Business Loan of $30.000.00 per month, and i have just had MLC stop as at june 30th paying me $22.000.00 per month in grandfathered traling commission, i will have to let staff go NAB have come and seen me because they knew the damage as the parent company obviously, i would not have payed $1.65 million for another book in May 2017 if in my wildest dreams i thought something Grandfathered would be un grandfathered, and who would have ever thought by a coalitition goverment!!! they just dont care one bit about us this current blue team, none of this crap would have occured under Howard or Abbott thats for sure, in shock still.
yes please you should go to the ombudsman too. Hope you’re ok mate.
How many clients in that book? 500? 600? 750? How do you see that many people? Did you buy it just because you werent subject to the same requirements as a FFS book? Seems money for jam has turned inedible.
if youre an Adviser advocating for any class action in Fin Services, you are low life who needs to be rid from FS. The only thing class actions do is line the pockets of lawyers. Stick with the ombudsman..
yes I am an adviser and the only way to fight this unjust situation is with “the devil you know”! I agree with you about class actions and the actions of these law firms but if it is the only way to fight back on principle and it “lines their pockets” then so be it. I would rather win on principle and give away 99% of it. I have had a GUTFULL of this unjust treatment!
If we need a class action why weren’t there enough donations to get the High Court action off the ground? It would have had a good chance as it was expropriation without just compensation. A class action causes a lot of damage but often pays very little to the plaintiffs.
I agree with you and I gave $1,000 to the High Court challenge. VERY EXTREMELY disappointed that more advisers didn’t get off their lazy arses and conribute to this cause! It is the PRINCIPLE of it and for the life of me can’t figure out what the hell is wrong with us advisers??? Let’s stick up for eachother and support our own.
De Ferrari is overseeing all of this happen on his watch whilst raking in a fortune.
This seems very different to a younger De Ferrari whom I understand built homes for the needy with Mother Teresa.
There is something very,very wrong in all of this.
How can anyone deny that abolishing licensees would be a great thing for advisers and move to self registration, get these leeches off your back who will find anyway to screw the client and the adviser.
AMP is a horrible company run by horrible people I feel sorry for the advisers that are under their license and have had to go through this horrendous process
but seriously the fact that people joined AMP in the first place screams for nothing but tighter legislation. These AMP advisers are the reason why we’ve got so much regulation. You’re saying there a horrible company but these people were prepared to work for them and flog their products and get well rewarded. So sorry I do feel bad that they got ripped,and purchased “registers” and borrowed money and they made wrong choices…. but I don’t really feel sorry for them at all. There are still plenty of advisers that would rather put their hip pocket first rather than their clients and until we get rid of them, it’s too soon to let people be self registered.
fair call. Most of these advisers joined AMP when they knew exactly what they were like.
Very much agree with both of you. It wasn’t a few rotten apples. It was a rotten barrel with a proportion of immune apples.
I joined AMP, fresh out of financial accounting – age 40. I didn’t know what AMP was like, and I was only given 5 pages of a contract to sign because “the full terms are on the website and may change from time to time”. I quickly learned not to trust AMP, that their management was incompetent at best, and I would only sell AMP products if they were the best for the client (so I had mostly external products!). But once the contract was signed, you can’t get out of it, as we’re now finding out the hard way!!! This is corporate terrorism, pure and simple. I don’t think any planner licenced under AMP or the big banks would stay with them if they had a choice to move elsewhere! ASIC better step in quickly, or this whole profession will be doomed! And then where will ordinary Ausralians turn for advice????
Those AMP advisers originally came from other licensees who taught them all they knew. All advisers are tarred with the same brush.
AMP normally requires a “Non compete” for 3 years so a lot of these advisers are left to dry out with no options
Yes, but who cares. After all they’re AMP advisers. The only ones that care are AMP advisers and they sold their sole to the Devil when they joined AMP.
You obviously lack compassion as well as being illiterate. It is soul genius not sole!
Is this where the term ‘barefoot’ originated since they no longer had any soles…
Thanks. I can spell FASEA and over regulation too. All caused because of AMP advisers and there “Registers” anything other than clients or customers and a desire to maximize BOLR.
Hey Dickhead, in many cases AMP bought the licensee the adviser had previously been under, iPac, Charter etc. Get your facts straight before you off load your ignorant mouth.
is this affecting Charter though?
I mean if AMP agree that Advisers cough up any money they need to pay out for complaints after they left, then i think its fair AMP stick to the original terms. If not, most advisers will get away pretty clean.
Good point. There was quite a bit of time to change licensees after the AMP takeover, though.
but they’re AMP advisers regardless so who cares. Wonder dog run back to your “Register” So an AMP adviser buying an book load of AMP products under an AMP owned licensee. Get your fact rights in that I never met a Charter adviser recommend BT or CFS or anything else.
Haven’t looked hard enough then, there are loads of us!
its NOT just AMP that is being bastards to their advisers…..
other AFSL’s are doing the same….
Inline with the FASEA requirements i completed my Ethics subject with Kaplan on the 28th of January this year at Wentworth park in NSW.
Waiting in the lobby for the exam to start with the 50 or so other nervous participants(who doesn’t get butterflies before
a 3 hour exam). A gentleman sat next to myself and a colleague and in an act of ‘over-confidence’ or ‘bravado’ or simply being a tool, turned to us to comment out loud what a joke the course had been, that he hadn’t studied or even opened the course work but was confident he would pass with flying colours and got high marks in the assessment without effort, so why start now.
I had no interest in engaging with such a person, but my colleague asked if he worked as an adviser to which he responded that he didn’t, he worked for AMP on BOLR sales. His role was to go in and evaluate businesses who wished to enact their sale clause. He made an effort to stress the focus was to find ways that they fell short, ways in which AMP could reduce the value of the business or agreed payment multiple. He gave an example of this, he said “if a business promised in a FDS that a client was entitled to 4 newsletters a year, and the adviser didn’t send 4, or even if an adviser did send the 4 newsletters but the adviser couldn’t demonstrate to us through things such as read receipt confirmations that every single client in fact received every one of them, then they failed, simple. The original agreement no longer stood and AMP then chose the value, a significantly lower than the adviser was expecting”.
He said that was ‘winning’ for him and he had been ‘winning’ allot lately.
I wondered in that moment if he knew that he was deriving pleasure in destroying the lives of advisers who worked for many years building businesses in good faith that they had this agreement in place. That the business they had dedicated so much of their life to would be worth something one day, that they could retire or look after their family with the proceeds from the sale.
Alas i had an exam about to start so i couldn’t focus on it for too long, but i have constantly thought about this fella, and how he ‘bragged’ that he could make an advisers business worthless with ease. With adviser suicides and adviser mental health at alarming rates, i wonder if the human in the situation is considered in what’s fair, or if its only about the numbers.
I find this deeply disturbing having just received my valuation which is 20% lower than the value of my register. I failed my audit because of the word ‘offer’ of review on my FDS’ even though these clients received regular reviews. We have had a family business with AMPFP since 1956. Thankfully my father is gone but he would be rolling in his grave about the way we have been treated by AMP.
This is yet another example of weaponised compliance being used by licensees to screw over advisers. In this case the licensee was trying to avoid BOLR payments, but weaponised compliance is also widely used to coerce inhouse product sales, prevent loss of clients when advisers change licensee, charge advisers unreasonable fees, and deflect blame onto advisers for inappropriate behaviour by the licensee.
It is why every adviser should become self licensed as soon as they can.
yes YES yes – and more complaints coming….
There should be a Royal Commission on the way AMP has treated advisers after reading this
shame on AMP and look out for Karma
170 year old company. Won’t be a 180 year old company. Who would ever work for them or use their products ever again?
One of the tests for financial advisers was whether they were prepared to sign a contract from a big licensee. Those contracts are shockers and I have heard the larger the licensee the less chance they was that the licensee would even stick to their obligations in these ‘contracts’. If you signed one of these …
At least one university had (has?) an ongoing agreement to funnel advisers into AMP. That they delivered young people into contracts like these is perhaps not surprising but is it ethical?
Do I hear the sound of bias, prejudice and misinformation. By the looks of the comments there is a lot of noise but nothing sound.
Ok, so where was Kate Carnell when the contractual rights for 1000’s of advisers (including AMP) to receive grandfathered commissions was torn up and stomped on by Govt irrespective of whether the Australian Government Solicitor had instructed Bill Shorten to not include these in FOFA based on existing contractual rights.?
The removal of grandfathered commissions should firstly have never been allowed to occur and secondly, as it has occurred, advisers and their businesses that have been severely financially disadvantaged should be compensated for the loss.
All adviser’s businesses that were affected have had business valuation write downs as a result.
Maybe there now should be a case made for representation of affected advisers ?
“fee for no service” wasn’t just about AMP, it was about the broader industry and the way most financial advice businesses operated. These small advice businesses derived much of their income from clients/customers to whom they provided little or no service. The situation sucks, but unfortunately both the individual advisers and AMP have to wear the cost of these changes.
There are other advisers out there who worked hard to wean themselves off Grandfathered comms as much as possible and move clients onto genuine fee for service, these advisers saw the writing on the wall IMO.
True, but the BOLR changes hit those advisers just as much. The worst hit ones might be the advisers who bought external lists of clients at silly prices, thinking they can sell them to AMP at an even higher multiple when they retire.
This is an example of Unconscionable conduct by AMP Financial Planning for what they have done.
Shame on you AMP !!!
Why would anyone want to work for you or be a client of yours ever again?
Disgraceful to say the least
What rubbish , how can business be worth 5 times renewal income when the government changed the law regarding opt in agreements to protect the revenue streams being acquired , just like a taxi license suck it AMP, you were given a free ride for to long. Swanky offices, overseas trips, low cost loans, subsidized costs and rejected the IFA market because it was to cushy.
Harsh big Mike. That was the contractural agreement that advisers entered into with AMP regardless of what other benefits they received.
If you had been in this boat you wouldn’t be happy would you?
It is not a boat you HAD to get into. It was just a very inviting boat … ‘Come into my parlour …’
I couldn’t imagine going into that boat when I started. It felt deeply wrong to even consider it, knowing how clients were treated at the time.
I only had a small business at the time, but was offered $100,000 to join. It would have cleared my home loan. I had an Asgard book and that was to be moved to the AMP white label. I was tempted, but thank God I stuck by my belief that if they had to offer me that size cheque, there must be something wrong with the place. Dodged a bullet here.
You would actually find Big Mike that many of these practices that AMP have destroyed were small practices that did not get any of these benefits you talk about but were simply younger planners that were trying to grow a small business in the current environment where its not easy and AMP destroyed them and their livelihood.
Most certainly it is the small businesses that have suffered the most. I’d like to see where my overseas trips etc have been for the last 18 years please!!
Spot on Mike!
Deadset stop crying and just cop it on the chin. Might have to do some work now ay???
I looked at AMP some years ago and didn’t like the wording in the agreements then, plus the writing was on the wall about fees replacing trail and the multiple on fees was much less (1x maybe??). So anyone who paid 4x trail in the last 5 years and still expected to be paid 4x at retirement was dreaming and are just finding themselves in a similar boat to most Advisers who put ANY value on their business. If ASBFEO can go in to bat for AMP Advisers, then why can’t they for me, against the Federal Government for abolition of trail commissions, or even MLC, CFS etc for early withdrawal of the payments?? Class Action anyone??
I’d love to know where the free ride was?? AMP has just destroyed the livelihood of many small business owners & their family’s lives. The big guys will come out smiling, as always, with their little club … the little guys who did the right thing & struggled by looking after their clients are the ones suffering. Many have lost their homes & everything. I think you are very ill informed & harsh – get your facts right mate!
You don’t follow the news much do you Big Mike? Taxis are well on the way to receiving their compensation packages. I’ve got Taxi licence clients and I can tell you that the fight was worth it.
So the taxi drivers deserved to have their licence devalued because the state allowed Uber to operate illegally and take market share. In the same way, the legislative changes assume that advisers did nothing for their clients. The big institutions cannot deliver personal service. That is fact. Advisers have bridged that gap. That is the elephant in the room that noone wants to address.