Ex-AMP adviser calls for objections to BOLR class action settlement

In July 2023, the Federal Court of Australia found in favour of advisers in the class action filed against AMP’s subsidiary, AMP Financial Planning (AMPFP), in relation to the wealth giant’s controversial decision to change its Buyer of Last Resort (BOLR) scheme.

Justice Mark Moshinsky ruled in favour of the class action group, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.

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However, in September, AMP announced that AMPFP had filed a notice of appeal in relation to the judgment in the Federal Court of Australia.

In November last year, AMP announced that an agreement had been reached to settle the class action brought on behalf of certain advice practices authorised by AMPFP as of 8 August 2019.

The settlement is for a total of $100 million and is subject to the finalisation and execution of a deed of settlement and approval by the Federal Court of Australia.

AMP said at the time that, in reaching a settlement, it makes no admission of liability.

Some advisers not happy with settlement

David Haseldine, the managing partner at The Updated Investor and a former AMP financial adviser, has called on other members of the class action against AMP to lodge a notice to object.

In an open letter to class action participants, Haseldine said he is “pleading with my fellow planners not to miss this opportunity to ensure justice is served”.

“If you don’t make the effort to object, chances are the settlement will proceed and AMP will essentially get away with taking a large chunk of your effort over the last how many years?” he said.

Chief among Haseldine’s concerns is the sum of the settlement, which he called “unfair and unreasonable”.

“Contained in settlement deed is a pretty good indication of the costs that will come out of the $100 million, which look like being optimistically around the $45 million mark. That means the 470 odd class members will share a settlement pool of $55 million or on average approximately $116,000 per class member,” he wrote.

“Personally, this is a horrific result as I very strongly believe what I am owed by AMP is at least four times this amount. I am also very firmly of the opinion I am a relatively small fish in the pool (well below the average size) so I might reasonably expect to receive significantly less than the $116,000 average when the remaining settlement pool is divided.”

While Haseldine expressed disappointment that costs were to come out of the settlement amount, he said he doesn’t “begrudge Corrs getting paid whatever it is they get paid”.

“Likewise, I do not begrudge the funders getting paid either. Frankly, we would not have got this far without them,” he said.

“What I do begrudge is that AMP get to take these costs out of the settlement pool given the obvious insignificant size of the pool already. Surely there is little doubt that this ordeal could have been sorted out much faster than it has if AMP wasn’t determined to win at all costs.

“AMP always has had the opportunity to do the right thing and thereby limit the size of the costs, costs which the planners are now paying even after AMP has been found to have done wrong.”

Haseldine added that he had hoped AMP would receive a “slap on the wrist for the predatory and unconscionable conduct I most certainly believe I was subjected to following the BOLR changes”.

He also noted that the redacted settlement deed “releases AMPFP and anyone associated with AMPFP from any group member taking any further action against AMP”.

“How is this fair or reasonable when its plainly obvious that AMP is expecting to sweep its wrongdoing under the mat for literally cents in the dollar?” Haseldine said.

“The deed indicates that group members can opt out of the settlement and protect their rights to pursue AMP but any amount they may have been entitled to go back to AMP (and not back into the pool).”

With all notices to object needing to be lodged with Corrs by Wednesday, 22 May, Haseldine said this could be the “last opportunity for justice”.

“If the judge determines that the settlement is fair and reasonable, that’s that and we will be stuck with whatever falls our way from the remaining settlement pool without the right to pursue AMP at an individual level,” he said.

“I appreciate this has gone on long enough and that, at this point in time, we are all fatigued and wanting to get on with the rest of our lives, but we owe it to ourselves and the 470 odd others in the group to do everything we can not to let a corporate juggernaut roll over the top of us as if we are nothing and what we were working toward, was worth nothing.

“The time is now for us to stick together and provide the judge individual contextual evidence as to why this settlement cannot be allowed to proceed.”

Responding to ifa’s enquiries about the class action and former advisers lodging notices to object to the settlement, an AMP spokesperson said: “The class action is following a standard legal process with AMP Financial Planning ready to pay the action’s agreed settlement sum of $100 million, following court approval.

“The court has appointed a contradictor to assist the court with the process and in the interests of advisers participating in the action.”