AMP, CBA and Westpac could be set to be targeted in a series of class actions alleging their advice licensees breached FOFA obligations.
Law firm Piper Alderman has signalled it intends to bring actions against the institutions, alleging they failed to properly implement certain aims of the Future of Financial Advice (FOFA) reforms by charging customers commissions in contravention to the law.
Piper Alderman’s claims will state that AMP licensees (AMP Financial Planning, Charter Financial Planning and Hillross Financial Services), CBA licensees (Commonwealth Financial Planning, Count Financial and Financial Wisdom) and Westpac (Securitor and Magnitude) contravened specific obligations to their customers when taking commissions from product issuers and customers themselves.
More than a million consumers were estimated to be affected, with the firm referring to numbers from the institutions.
Piper Alderman partners Simon Morris and Martin del Gallego are running the claims, which are being backed by Woodsford Litigation Funding.
Mr del Gallego told ifa the firm’s investigations into the proposed actions were driven by statements and documents filed by the financial groups during the Hayne royal commission.
“We are unable to get into the detail of the claims until after the actions have commenced, but in short, they will allege that each of the institutions failed to properly implement aims of the FOFA reforms designed to protect client interests in their relationships with these institutions,” he said.
“It will be alleged these institutions have breached numerous related obligations.
Consumers that acquired, renewed or continued to hold a financial product, including life insurance, on the advice of an adviser during the last six years have been invited to participate in the action.
Speaking on the commissions customers were charged, Mr del Gallego commented, “Charges varied from institution to institution, and from consumer to consumer, but commonly operated as a volume based percentage.
“We are not currently in a position to quantify the total sums in issue, but we expect based on the evidence presented at the royal commission they will be very significant.”
Mr Morris added that the claims do not overlap with other actions against the groups.
“Piper Alderman is seeking to recover money through these claims that will not be recovered in any others,” he said.
The firm that filed the claim, Shine Lawyers, indicated it is planning to file similar claims against CBA and BT.
AMP Financial Planning advisers have also filed a class action against the wealth giant.
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