In a response to questions on notice from the House economics committee, AMP revealed that over the course of 2019 and 2020, it had set up more than 42,000 eligible rollover funds (ERFs) in the name of clients that had were owed remediation funds from the institution.
AMP said as of 30 June 2020, around 17,000 of the affected clients had transferred their remediation funds out of the ERF and into their preferred super fund, leaving around 25,000 of the funds still unclaimed.
The group came under fire at a House economics committee hearing in July, where it was revealed that the ERF products used to refund client money had underperformed their peers by more than 40 per cent over a 10-year period.
At the time, AMP chief executive Francesco De Ferrari said a like-for-like comparison could not be made with the fund and that the institution had had no other option when it could not locate the relevant client to distribute the refund.
“Our ERF is unique in the industry because it is a capital guaranteed product – it doesn’t charge entry, exit or switch fees and it works on a crediting rate, which means the [AMP] Life board would decide a crediting rate that is provided net of fees to the client,” Mr De Ferrari said.
“You need to compare it to a cash equivalent – a client [in cash] would get CPI, which is 2.1 per cent, or if you keep cash in the bank the equivalent is 1 per cent.
“We felt the spirit of the law was to reunite the money as quickly as possible with a client’s super account and not take any risks with a client who we can’t find and who we don’t know.”
AMP noted in its response to the committee that just 240 of the remediation accounts created for clients had been related to fees for no service.
In further responses around its dispute resolution processes, the group noted it had received 81 complaints through internal dispute resolution in the 2020 year to date, while six complaints had gone to AFCA, with two of these having been resolved.
“Themes of these complaints include appropriateness of the advice, fees for service and the remediation process,” AMP said.
Every non-aligned adviser knows AMP products are just crap. (North is a small exception in a pool of crap). Now AMP are being told there products are crap. At least you’re getting your BOLR, and we got fasea’d but hey. Nice one AMP advisers.
BID – AMP yes plus fees – Client No – more remediation for clients and more mud for advisers. another example of AMP looking after AMP
How does one claim or even check if they or their clients have one of these established?
We have new clients coming in all the time who may have switched out of AMP years before coming to us that may have been eligible.
Should be in clients ato linked mygov account. Basically everyone you come across that had amp, get them to register mygov and link ato.