An open letter to certain AMP shareholders has accused the group of “systemic bullying and harassment”, asking investors to hold the company accountable.
It has outlined details around the banking royal commission, the changes to the buyer of last resort (BOLR) valuation method and the consequent class action filed by advisers against AMP.
“We are [a] group of AMP planners who were terminated without cause, had our businesses stolen, our futures jeopardised, our families ruined and our health destroyed,” the letter stated.
Following the royal commission, AMP shifted blame onto planners for failures of the management team, “accusing planners of being ‘unprofessional, non-compliant and non-profitable,” the letter said.
It has also charged the company with coercing advisers into accepting deals under the BOLR changes. AMP recently issued final termination notices to a number of advisers, which said they must repay their outstanding loans or have their authorised representative status revoked.
“Planners are bullied and harassed into accepting AMP ‘special deals’ to avoid the total ruin manufactured for them by AMP,” the letter stated.
The authors have kept themselves anonymous, citing fear of retribution from the company.
“As major shareholders, ask yourselves, based not only on quantitative numbers but also on moral and ethical grounds, if you can, in all good conscience, support the actions of AMP management,” the letter said.
ifa understands the letter was sent to Harris Associates, Allan Gray, Lazard Asset Management, BlackRock Investment Management Australia, Vanguard Investments Australia, APG Asset Management, Norges Bank Investment Management, Invesco Asset Management, Dimensional Investing, CGI Glass Lewis and Wilson Asset Management.
Spokespeople for BlackRock and Lazard said their companies do not comment on individual holdings in their portfolios, while Dimensional declined to respond. CGI Glass Lewis, which is a proxy advisor, has clarified it is not a shareholder.
ifa has contacted the other shareholders, but is yet to receive a response.
“As major shareholders, you have the ability to ask the questions and get answers aimed at arresting the ongoing scandals at AMP which have, and continue to, decimate shareholder value of what was once a great organisation,” the letter said.
“We genuinely thank you for taking the time to read this letter and sincerely hope you will have the courage to ask some serious questions at the AGM.”
AMP will host its annual meeting at the end of next week (Friday, 30 April). The board could face a spill if a quarter or more shareholders vote against its remuneration report for the second year in a row, under the two-strike rule.
An AMP spokesperson responded to the letter by saying the “financial advice industry has transformed dramatically in the past few years, including the removal of grandfathered commissions and new mandatory education standards”.
“The purpose of these changes is to improve outcomes for clients. AMP has made difficult but necessary decisions to ensure we adapt and continue to have a strong, viable, fee for service based advice business for clients,” the spokesperson said.
“While many advisers have been able to evolve and adapt to these rapid changes, some are unfortunately leaving the network because their businesses are not sustainable within the new market environment. The BOLR audit process ensures advisers receive fair and appropriate valuations based on the compliance of their business and their dealings with their clients.
“In addition, our transition management team has been in regular contact with each adviser, recognising the change is difficult and working on an individual basis to help them through the transition. This includes providing access to counselling and wellbeing services, and when applicable AMP Bank working with advisers to address their unique financial circumstances.”
Across AMP’s core licensees, it had 1,573 remaining advisers at the end of December – a 26.1 per cent fall from the year before and 39 per cent from 2018. The number of practices has declined even more sharply, down by 37 per cent in the 2020 year to its current total of 595.
The drop-off in numbers has nearly all been driven by AMP’s advice reshape program, chief executive Francesco De Ferrari said in February, as the result of a “deliberate effort” to ensure the group has a compliant and sustainable network.
if the substance of their complaint is accurate and they have lost everything, seems no need to stay anonymous. I think alot of AMP advisers were inexperienced and bought it, and AMP compliance/corporate had a terrible culture of people and a high level of incompetence.
I would give my name but I am still involved in the legal action against AMP and operating my business. There is a reason to stay anonymous and it isn’t my fault you don’t understand why.
In an environment where regulators and institutions have the ability and the inclination to unfairly persecute people, there is always a need to stay anonymous. This applies far more broadly than AMP.
I am present in the meeting some time early nineteen where amp said to their planners if you stay for a period of 10 years and you write ex amount of business you would never have to pay the development loan and I personally asked the question (s) what did they mean by development loan it meant the same. As above stay with amp for 10 years write ex amount of business and you never have to pay the development loan back and the majority did not even know that amp had already send the money to them and no one has said anything about $100k key men insurance and yes I do have not all but some records in my possession
And yes amp did force many of their planners to sign loan agreements they had no choice no choice
did they bother to read the contract they signed
Much of the complaining seems to consist of “AMP told us this, AMP promised us that” so I suspect no, they didn’t read (or understand) the contract.
These were risky business transactions covered by commercial contracts. They had the potential for high returns or large losses. They weren’t employment offers. They weren’t guaranteed investments. Unfortunately a lot of people don’t seem to have understood what they were getting into.
You could potentially argue the contracts were unconscionable, but when the recipients were supposedly professional investment advisers themselves…?
It’s got nothing to do with what’s in the contract or whether the advisers read the contract or not or whether they understood what’s in it. It’s about AMP breaking the contract terms and acting unlawfully. End of story.
How do advisers know AMP broke the contract terms and acted unlawfully, if those advisers never read or understood those contract terms?
There is a class action which will determine if AMP breached the contract. The lawyers involved obviously think they did. Personally they could change the position for grand fathered commission because the government changed the rules, AMP lying to ASIC and being caught out in a Royal Commission is not a reason to change the contract.
The inability to leave without being bankrupted or agreeing to not take part in the class action has also been subject to numerous complaints so I would suggest you go off facts and not AMP spin doctors. Personally I am really looking forward to the class action findings and believe the end result may be a building near Circular Quay looking for a new tenant.
AMP say that “businesses are leaving because they are unsustainable”…really AMP manage your own backyard first, and let’s see who is unsustainable or not. By the way, did you ever bother to ask these terminated practices what their profitability was? No! Did you ever assist these practices to become sustainable ? No. Case dismissed your honour!
‘spokesperson’….this should read ‘spin doctor’. They continue to lie and deflect what their actions have done to the advisers and businesses that have been their only advocates through all the AMP affairs over the last 10 years.
Disgraceful and disgusting behaviour.
They have destroyed so many planners lives and futures. They stolen hundreds of millions from the very planners that built the company. MURRAY, Ferrari and Board have caused health, financial problems for many families which will last a lifetime. Murray, the Board, Ferrari, Wade, Akers and George should hang their heads in shame! I wonder what they tell their loved ones what they do at work?
When they all walk into their multi million homes they say to their loved one, good news I got another bonus this year, while destroying shareholders value and the financial practices they apparently are partners with. They don’t care about anyone but themselves, it’s the AMP way.
Things like increased profit & investment compared to last year should just happen. A return to paying dividends would also be nice to see. There’s no need for any negative actions or harassment things will turn around.
Easy to move up from a low ball point across the entire market. The lowest hardest hit companies have the most to potentially regain.
Monitoring and supervision is the licensees responsibility. Ten year look back is a ten year fail for the licensee.
Shall we ask Kneel how the Adviser Class Action is progressing?
What they need to do is bolster there earnings as much as they can while reducing uncecessary costs… fighting like that is silly & will only reduce there chance of a post COVID turn around. They should sell of assits that were under performing before COVID & allow the ones that were performing to grow there way out. Reinvest every spare cent in higher performing assists.
The first step might be to rebuy a stake in Janus Henderson that has taken off & continues to gain momentum.
The job has not been easy on the executors and I feel slightly sorry for them as the majority are good people doing the biding of their higher ups. I approached AMP on at least 25 occassions to negotiate on items linked to my execution and the only thing they changed was the point that I mentioned to them was obviously an error as it was in my favour.
I also had 10 “innocent mistakes” which were all in their favour. I found it strange that all of the “innocent mistakes” were in favour of AMP but maybe that is because I’m non compliant according to AMP. Despite this I can’t remember the issues they have had with lying to ASIC having anything to do with a licensed planner with it more linked to their corrupt management.
Great news and I am proud of these people who keep fighting for all of us who have been executed in the name of “…a strong, viable, fee for service based advice business for clients” after laying to clients and deceiving them. Very touchy and “caring” statement from AMP
And again, AMP are full of it. No one, and I mean NO ONE, listens to what their “spokepersons” say anymore.
Doesn’t matter. The question is, will these shareholders, continue to invest their money through AMP and support AMP’s woeful practices, or will AMP become an “unethical” investment?
Recently AMP terminated a few Ethical Incitement options I believe as the result of the company understanding that AMP and Ethics can’t apply at the same time
Yes, that is funny. An unethical company offering ethical investment options.
Hi Sarah,
Although the last line “… a “deliberate effort” to ensure the group has a complaint and sustainable network” has proved to be accurate in the past, and most likely in the future, I think you mean “compliant”. Though it is AMP so I may be wrong.