Darron Mink, Geoffrey Needs and Calvin Barlow were found to have breached best interests duty obligations by ASIC in 2018, following an investigation commenced when AMP reported systemic breaches by one of its planners, Rommel Panganiban, who was later banned from the industry.
The three advisers were named along with two others in Justice Lee’s judgement against the wealth giant in February 2020 as having breached sections 961B, 961G and 961J of the Corporations Act in relation to advice provided to 10 clients, when the Federal Court ordered AMP to pay $5.18 million for failing to prevent best interests duty breaches by its advisers.
The case related to advisers engaging in “re-writing conduct”, or providing advice that results in the cancellation of the client’s existing insurance policies and places them under new, similar schemes by way of new application rather than a standard transfer.
According to the ASIC adviser register, Mr Mink continued to work as an authorised representative of AMP Financial Planning until October 2020. Mr Needs was authorised under AMPFP until 6 May 2021, while Mr Barlow remains a current authorised representative of the financial planning group.
It’s understood while the advisers faced internal disciplinary action as a result of the breaches, they were not considered serious enough to warrant a termination.
A spokesperson for AMP said the institution had “clear policies and expectations of advisers, with systems and frameworks in place to review adviser behaviour and apply appropriate consequences to protect clients”.
“The financial adviser at the centre of ASIC’s investigation was terminated by AMP in 2014 prior to ASIC’s investigation and proceedings taking place, and clients have been remediated,” the spokesperson said.
“Reviews of advice provided by the three other advisers referred to in the claim concerning insurance re-writing were undertaken previously, and termination was not considered warranted in the circumstances.
“AMP clients can be assured they will be remediated when they have demonstrated loss as a result of inappropriate advice.”
The news comes following the wealth giant terminating a large swathe of its adviser force on the back of its wealth transformation strategy announced in mid-2019, with AMP maintaining it wanted to focus on “a professional and compliant network” of planners going forward.
Once again Terry seems to have been hard done by.
Revoke the AMP license.
The majority will find a better home elsewhere.
I have seen Licencees award these churners for years, and whenever I raised my head to question the practices I was slapped down and eventually driven out of the business
This is why the LIF legislation came into play.
These “churners”, rewriting insurance for the 125% upfront commission every year. AMP knew it was going on, but turned a blind eye to it, as these were the larger practices adding to AMP’s coffers.
One of the named planners also managed to pass audits after cutting and pasting signatures onto AMP Bank home loans (SMH May 18 2020).
Yet AMP in their wisdom, decide its best to attack and remove a majority of their single planner practices, devalue their business’s and then completely degrade them with BOLR and look back audits on files they have previously audited, as they create “no value and are a compliance risk”.
Meanwhile the former CEO takes his inflated salary, cashes in his underpriced performance rights and sails off into the sunset as the ship gets broken up to pieces.
Agree that if premiums increased by 70% you would have to look at your clients options but that didn’t happen on a yearly basis.
Fascinating that AMP only finally picking this up on some advisers – and some of their top award winners, who have been “churning” for years, openly talking about it and then being applauded with AMP FP honors and awards. That behavior of deliberately “churning” was never acceptable, then and now.
This is quite separate to re-writing a life policy for reduced premium reasons or change of client circumstances, where the existing policy was not in the clients best interests and there was a better policy availed in the marketplace.
Yes, never acceptable.. However wide spread up until the past 3-4yrs since they finally started putting a broom through the industry…
Disappointed Adviser – you clearly don’t know how awards operated at AMPFP……it was on net business flow so if you churned a policy the net effect was most likely zero unless it was increased.
Yes most posters on here have no idea about this but don’t let the truth get in the way of a good story!
Pretty sure when you churn 10% trail into 120% upfront it results in a net increase in cash flow.
Yes they would have received the extra cash flow brokerage known as a Reward BUT that would NOT have helped to get them any Awards (only an INCREASE in the client premiums counted as net cash flow but probably unlikely that occurred) which is what the reply to poster was about…
Again don’t let the truth stand in the way you tell the story.
The main point I was making was that it was major award winners – who should have known and operated to a much higher standard (and moral and standard code of ethics), that were some of the main churners for years. Whether it helped them to an award or NOT is not the point. Clearly you seem to be defending the indefensible No Awards
Why weren’t they banned by ASIC like so many others? Or is $5m enough for them to look the other way?
Quick question which has some relevance here. What is an adviser to do when they have multiple clients with policies with an insurer which has increased premiums by 70% and there is an alternative insurer offering the same level of cover at a cheaper cost. Is it ASIC’s view that this is churning? Is the adviser expected to do all the work to do the research, complete a SOA and implement the new cover for free? Funny how best interest duty can be ignored and people tarnished with the churner tag when it suits the same insurers increasing the premiums.
No, that is perfectly acceptable as it is in the client’s best interests. The above AMP advisers were cancelling existing policies and them rewriting them in the same product or another AMP product as that meant AMP benefited from it and turned a blind eye. This put the client as great risk as policies were cancelled before others were in place, and were not compared to all non AMP products available.
I agree with your comment, but I don’t think ASIC agrees with you. In their mind any client moved from one insurer to another has been churned, especially if an adviser is paid for their work to put the client in a better position. Otherwise why are they making it impossible to provide quick and simple advice to clients to move insurers when premiums are substantially increased. They need to stop listening to the FSC and talking with advisers and clients, something they refuse to do.
AMP was happy to ignore compliance breaches when they benefited from it financially. Good small businesses who didn’t charge big enough fees to their mum and dad clients, or churn insurance into new AMP policies (because, in my experience they never compared well price wise) were the ones AMP through under the bus and labelled ‘non-compliant’ even though they previously passed all their annual audits. This was to enable them steal small businesses for a fraction of their value and profit by on selling them to bigger firms that would increase fees and favour their products. It’s disgusting behaviour and the hundreds of good advisers who have had their financial and mental wellbeing destroyed by this greedy, incompetent corporate is despicable, as is ASIC’s refusal to do anything about it.
ASIC’s view when they complete the survey on how LIF has worked will be that it is churning and the end result to stop this will be a complete ban on commissions. It’s a stupid view but I’d be amazed if its not what happens.
are you guys entirely stupid – AMP has compliance breaches – we all have compliance breaches under the new FASEA code – In AMP’s case they have “manufactured” some of these breaches with the sole intent of punting what would have been otherwise reliable advisers. Curiously these “so called breaches” were inherited from AMP who are not able to produce any form a “passable record” to the acquiring adviser. This audit failure game is a technique that has been used to attack the advisers and deny them the ability to service the client books. In this situation, I suspect you will find “the fish is very rotten from the head”. What is going on within AMP is disgraceful – and you would probably be better served drawing attention to the licensees behaviour