Advisers have implored the wealth giant’s largest shareholders to ask some “serious questions” about their fate at the company’s upcoming annual meeting.
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.
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