AMP to release documents on BOLR changes

Court documents from late last year reveal Justice Mark Moshinsky ordered AMP to give discovery of a range of documents to lawyers representing AMP Financial Planning advisers in the case by 31 March.

The documents include those relating to any possible change in AMP’s BOLR policy in the year leading up to its August 2019 announcement that BOLR multiples would be changed, as well as those dating back to January 2018 that discussed the likely occurrence of a decrease in the market value of client register rights relating to grandfathered commissions.

In addition, AMP was ordered to release documents “relied upon ... as constituting notice to the change of BOLR multiple”, and a copy of meeting minutes, papers and documents relating to the 7 August 2019 board meeting in which the changes were decided upon.

The list of discoverable documents also included those relating to whether an “economic change” had occurred in the two years leading up to the change of policy, and documents relating to consideration of AMP Financial Planning’s liability in respect of its BOLR obligations before and after the changes.

Last year, ifa reported the legal argument in the case would centre around terms in AMP advisers’ BOLR contracts and whether the group was required to give 13 months’ notice before any change to BOLR values, or whether regulatory change such as the removal of grandfathered revenue constituted special circumstances.

“There is a clause in the contract and it basically says that if there is a detrimental change [to values] AMP has to give 13 months' notice, [and] advisers can give six or 12 months’ notice to exit before the new terms come in,” Neil Macdonald, chief executive of AMP’s Advisers Association, said at the time.

“There is a separate clause that says ‘subject to the above, if it’s economic, legislative or political changes then AMP can make changes’, but the intent is that that was only ‘subject to the above’, which is if it’s detrimental they’ve got to give notice.”

The judge further ordered AMP to produce a document recording each purchase or sale of client register rights between January 2017 and August 2019 between AMP Financial Planning practices, as well as AMP Financial Planning client books sold externally and to advisers belonging to other AMP aligned dealer groups.

The detail to be published in the document would include the date and purchase price of each transaction as well as the implied multiples to revenue relating to ongoing fee arrangements.

The court ordered the AMP adviser class to provide a $1.5 million security for AMP’s costs in preparing the documents for discovery, in the form of deeds of indemnity from a number of insurers.

The case continues with parties due to provide subpoenaed documents related to the proceedings on 3 February.