Australian Small Business and Family Enterprise Ombudsman Kate Carnell commented that small advice business owners have told her that “licensors’ handling of matters have not been transparent or equitable”.
The ombudsman has called for advice licensees who feel their treatment has been unfair to come forward.
“We’re concerned about a number of behaviours that may include the conduct of lookback audits, financial planning licensors shifting responsibility for client compensation payments to licensees, short notice periods provided to licensees exiting the business and restraint of trade provisions,” Ms Carnell said.
“Following recent media reports regarding AMP Financial Planning’s restructure of its business, my office has received dozens of requests for assistance from small business financial planners across a number of licensors, many of who say they are facing financial ruin.
“Small business owners are reporting that they are facing the brunt of brutal restructures by their licensors.”
Small or family businesses that have been impacted by changes in the advice sector are encouraged to contact the ombudsman’s office.
ifa has reported extensively on the effects of AMP’s buyer of last resort (BOLR) scheme downgrading the value of its advisers’ businesses, with some practices receiving termination letters as the bank overhauls the division.
A growing number of AMP advisers could be forced to sell their homes to pay back business loans to the bank.
The FSU last month lodged a dispute with the bank over the BOLR issues, while the AMP Financial Planners Association has looked into filing a class action.
Further to AMP, the big four have also all acted to depart from advice. CBA exited the last of its businesses in the sector earlier this year, selling Count Financial for $2.5 million and retiring Financial Wisdom and CFP Pathways.
[quote=Ex AM lacky]An AMP complaints manager called me yesterday. She asked if I wanted to hand back a legitimate $90 fee paid to me from 5 years ago as the client had made a complaint. The rationale was that the complaint could be handled and put to rest if I was to bear the cost. At the time of speaking the manager had spent several hours trying to avoid repaying the fee and then called me as a last resort. I had purchased the client for $270 from AMP and other than the $90 I had never received another fee or payment from the account. I basically told her to get stuffed and suggested that it was not a good use of her time to spend more than the requested remediation cost on trying to avoid remediation. [/quote] I am sorry to point out the bleeding obvious but I think you handled this all wrong. :p I would have completely agreed that the $90 was refundable on the basis that the client is complaining of no service delivery. I’d have then pointed out to AMP that this was also the case previously and that the $270 multiple you paid for the purchase of the client where NO fees were in fact due should have reduced the purchase price and did they want to refund YOU!
An AMP complaints manager called me yesterday. She asked if I wanted to hand back a legitimate $90 fee paid to me from 5 years ago as the client had made a complaint. The rationale was that the complaint could be handled and put to rest if I was to bear the cost. At the time of speaking the manager had spent several hours trying to avoid repaying the fee and then called me as a last resort. I had purchased the client for $270 from AMP and other than the $90 I had never received another fee or payment from the account. I basically told her to get stuffed and suggested that it was not a good use of her time to spend more than the requested remediation cost on trying to avoid remediation.
please give me break… YOUR GOVERNMENT created the environment to have planners screwed by big business.. YOUR GOVERNMENT to be seen as doing something to appease the left wing/general public, have blindly implemented the RC recommendations that effectively helped to destroy small financial planning businesses.. just go away – the mess you have created will takes years to unravel
biased and unfair. Lets be real, and call a spade a spade. The Libs got bashed by Labor for avoiding a RC then there came a time where they couldnt any longer. The Libs watered down FSRA massively. You held onto grandfathered commissions for another 7-8 years before of the Lib Gov. Labor wanted to snatch it years ago.
What a mess!!!
The biggest issue in the industry is licensors shifting responsibility for client compensation payments to licensees. What the big 4 are doing is a disgrace. Advisers that are spooked or impacted will not forget, so good luck distributing bank owned product through them in future.
if its the Advisers fault, then they should be liable up to the PI excess. Why should it be any difference? How can you ask for impunity as a professional? If you see yourself as a car salesman..then i can understand.
That’s welcome. Kate is well connected in the Liberal Party , which of itself may, or may not, be an asset. But the more public commentary that can be generated by non-industry types is welcome, give that politicians respond when the noise gets LOUD, and our Treasurer has a tin ear.
Better give her the results of your poll re the exam and warn her of the further mass exodus.
I have just one question. If everyone can’t kick the you know what out of financial advisers anymore than who is getting kicked?
For a true picture, how about they contact some of the widows of the planners who were sadly too overwhelmed by all of this to find out how their lives have been forever destroyed.
is this true? havent heard about it anywhere…
What a mess! if it wasn’t so serious it would be comical.
All this while DeFerrari negotiated the share price hurdle for his $7 million bonus down, making it easier to attain… All highly ethical it seems.