ASIC commenced civil penalty proceedings in Federal Court on Friday against six companies that are, or were, part of the wealth group including AMP Superannuation, AMP Life, AMP Financial Planning, AMP Services, Charter Financial Planning and Hillross Financial Services.
It’s alleged that between July 2015 and April 2019 the companies charged advice fees to 1,540 customers despite knowing that those customers were no longer able to access the relevant advice and failed to ensure that a system that did not charge customers who had left the account was in place.
ASIC has alleged AMP received over $600,000 in advice fees.
AMP responded to the news on Friday morning.
“In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a plan service fee after delinking from their corporate super plan into a retail account,” a statement read.
“AMP took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process.
“The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fees charged and lost earnings.”
A hearing date is yet to be set.
The news comes after AMP announced a shake-up to its advice model on Monday, including the conclusion of client register buy-back arrangements for its authorised representatives.
Speaking on a conference call to coincide with the announcement, AMP’s head of advice, Matt Lawler, discussed how many advisers will opt to exit the company by year’s end, given it will cease buyer of last resort arrangements.
Though he would not speculate on how many will exit, AMP remains confident all can be managed.
“We’re not going to talk about numbers, because obviously that’s going to play itself out,” Mr Lawler told ifa.
“But we have a team that specialises in mergers and acquisitions and supports our advisers. We expect a lot of these businesses will be picked up.
No doubt ASIC’s lawyers will be QCs on $15k per day. It’s all on the advisers’ tab.
What mechanisms are in place regarding this cost which can demonstrate that the fees and charges being assumed for this service are fair and reasonable and represent value for money for the client?
AMP is a disgusting unit, but why bother suing them for an issue they have self-reported and fixed?
I know why, to justify a further hike in the ASIC levy…
What services is Kenneth Hayne providing to taxpayers for his very generous inflation-linked-for-life Judges’ pension? And why didn’t anyone ask him this during the Royal Commission when he was pointing the finger?
Where’s his FDS? And has anyone here signed his opt-in agreement?
I hate AMP but what a waste of time
Whatever it is , we pick up the bill for ASIC, not bloody AMP.
[quote=Anonymous]This is what the asic levy is needed for. If you don’t want to pay it, then leave… Deal with it[/quote]
Says the ASIC employee……….
Wonder is the ASIC is capable of winning this case – or is ASIC just paying itself well and running the case to made themselves look good – and get another bonus?
“ASIC has alleged AMP received over $600,000 in advice fees.”
Wait, are ASIC going to sue AMP because of $600k, when AMP have already remediated $900k
WTF are we paying this for?
The blank cheque from Advisers so that ASIC can litigate everything under the sun is ridiculous. It’s textbook Moral Hazard.
Seems a great use of ASIC’s time and resources.
I guess it doesn’t matter when the model is to simply recover their costs from the industry they supervise.
It’s well overdue and time the industry as a whole stand up and fight for our futures. (lead by the associations that we are forced to be members of)
ASIC isn’t the only issue here! AFCA and the complaint process is so unjust it’s unbelievable! I’d love to see the FPA and AFA use their member funds and marketing levy’s to actually create some ads pointing out the governments/ASIC’s unfair and predatory behaviour against small business and the industry.
Hear hear. It’s the guilty who should be paying the fees to regulate their misbehaviour. Not the honest, ethcal small businesses. Once again, it seems if you play by the rules and tell the truth you get shafted. Why isn’t CBA and AMP paying the lion’s share of this levy? Because they are in the pocket of the LNP government and ASIC, that’s why.
When is this witch hunt ever going to end as it only devalues the industry? This is clearly the chicken and the egg syndrome. Maybe common sense should prevail. For those account holders, where it was alleged that no service was provided, did have the option to contact their providers and request some form of service. In my decades of experience, I find that is an element of complacency relating to anything regarding effort. A prime example is the number of people who are able but do not see the urgency of getting vaccinated. I have previously iterated that the Hayne Royal Commission in its recommendations got it wrong with their recommendations and now look at the mess it has created.
My wife and I received no service from 2012 until 2021, having been advised in writing that our advisers service was not wanted and therefore not rendered. We received a total of $25000 and forced to sign a deed in order to get paid. Go Figure!
So you didn’t check your Super statement for 10 years either?
He said they sent in a letter saying they did not want advice. I presume in 2012. That is the point of the fine. AMP charged the fees EVEN AFTER clients requested the advice to cease. In writing.
How did you get a refund when there was no legal requirement to renew advise fees prior to 01.07.2013? In this instance all an adviser is required to do is send an annual FDS, that’s it!
Some companies have refunded all adviser fees from certian products from 2010 onwards, without clients even asking for it. The big companies have rolled over and just refunded everything as they can take the hit. Not putting up any fight about asic retrospectively changing agreements to include a annual roa has meant all of us are in the same boat. They sold the industry out, and continue to do so.
Clearly not in an Industry Fund – I would like to see you get money back from Industry Super for Intra Fund Fees? That would be amazing.
[quote=Anonymous]This is what the asic levy is needed for. If you don’t want to pay it, then leave… Deal with it[/quote]
So how many ASIC Levies are you paying in your business?
ASIC is corrupt. So Shipton and Crenan can steal money from ASIC and pay it back, and there is no follow up action. ASIC staff should be held to a higher standard, yet both got to walk away with absolutely no penalty while they chase headlines by kicking the easy target, AMP.
Isn’t it interesting that ASIC ends up being the only one who profits here because they will sue AMP for millions and pocket the fines then increase the Levy on the rest of the industry instead of passing the proceeds on to the people who actually lost the money – very vertically integrated and self-serving and shows what greedy parasites ASIC are and what the real reason and cause of their existence is!
Well after being exposed as an utter failure in protecting the consumer … they need to pretend they’re doing something. It’s a total outrage that small business is paying the price for the shocking crimes of the large corporate donors.
I pay ASIC thousands of dollars every year and get no service. Can we get ASIC to take themselves to court.
They would probably find a way to lose as both the accused and defendant though and then somehow charge me for the court costs and then find a way to blame global warming on financial advisers because we waste so much energy and paper preparing 100 page SOA’s which are never really looked at (other than the synopsis page) by clients.
“AMP took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process.
“The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately A$900,000 covering fees charged and lost earnings.”
And yet ASIC is still wanting blood!!!
ASIC has destroyed the landscape completely where thousands of firms have fled the large insto dealer groups into self licensing. Now ASIC has no way to monitor and police those groups as they will NEVER expend the energy, time or money to find them out.
The cost of advice has skyrocketed and all those small clients are now no longer advised or serviced. Great job ASIC!!!
Lets see how easy it is for you to police the masses when you cant see them.
Careful what you wish for with the new breach reporting and DDO coming in as well as Fee Agreements, ASIC will have eyes and ears out there with other licenses and fund managers who will be obligated in reporting any perceptions of bad advice
But no chance of offsetting any fines received against the rort ASIC is perpetrating against financial advisers. ASIC is no more ethically or professionally moral than the entities it regulates. In fact, I’d say ASIC sets its staff the very same incentives that it’s banned financial service providers from paying their staff.
So ASIC lost the criminal case, and now they want to waste more of my money.
“Why not legislate?” – because you are using my money, that’s why!!!
When will ASIC sue themselves for Fee For no Service, using their own money?
Well said
Intra fund advice fees in the millions and charged a fee for no service never heard of it…….
Oh no! Can you imagine the legal fees associated with suing all these intrafund companies…
Another fine example of ASIC raising revenue and headlines. Unlike Advisers though, the corporates will never be banned from providing financial services.
Seems like for the first time since 1849, that AMP have actually done the right thing.
Well how about they fine them enough to cover our levy for the next 12 months!!! – $10000 for each breach should go a reasonable way!!
It’s not going to cover us…just bolster the liberal parties funds to stay in power:..
This is what the asic levy is needed for. If you don’t want to pay it, then leave… Deal with it
My small business should not be penalised for AMP or any of those major companies like the banks doing the wrong thing. Sorry, but my revenue does not grow on trees and I am sick of every one with there hands out wanting money from me. FPA wants a marketing levy, FPA fees, PI Insurance which is skyrocketed to just under $10K a year, Dealergroup costs, IT costs, Xplan costs, Staff costs and thanks to ASIC taking all the good personal assistants into compliance we now pay $70-$80K just for a basic admin person, Rent costs – its getting ridiculous. The time spent versus the stress and reward is not working for small business in the Financial Planning world and it is people like you saying what you have that just don’t seem to understand this. Your situation is clearly different but think about others for a change…. Again, we should not be paying for those that do the wrong thing. This includes the PI Cover. Its very unfair.
Who are you? Do you get paid?
Why should we pay a levy so that ASIC can fund their litigation? This doesn’t help my business.
When I was unfortunate enough to be linked to AMP I tried to get some of these fee’s switched off and AMP did not want anything to do with it because they were getting the income. Yet another reason for them to do financial planning a favour and fold.