The corporate regulator announced it is taking AMP to court over another advice scandal, this time involving AMP entities that allegedly charged fees-for-no-service on corporate superannuation accounts to 1,540 clients between 2015 and 2019.
ASIC alleges six entities charged fees despite being notified that customers had left their corporate superannuation account and were no longer able to access advice, including licensees AMP Financial Planning, Charter Financial Planning and Hillross Financial Planning.
The news comes two weeks after ASIC dropped a separate long-running investigation into AMP over fees charged to clients whose adviser had already left the company and sold their business via AMP’s outgoing buyer-of-last-resort agreements.
In a statement presented by ASIC related to the court filing, the regulator details how AMP Life (which is now part of the Resolution Life Group but was part of AMP at the time), deducted plan service fees (PSFs) from members accounts and remitted those fees to advice licensees.
“In turn, the Advice Licensees retained a portion of the PSF and remitted the balance to the authorised representative providing the advice services.”
This came despite the member having ceased employment with the member/sponsor, ASIC says.
“Upon cessation of employment, the Advice Licensees did not (and could not) provide any advice services to the Affected Members referable to, or which could justify the charging of, the PSF,” ASIC continued.
“The Advice Licensees accepted payment for financial services in circumstances where there were reasonable grounds for believing that each of them would not be able to supply the financial services within a specified period, or at all.
In a response posted on the AMP media centre, the company acknowledged the filings, noting that the errors were picked up in 2018 and clients were remediated thereafter.
“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.” AMP stated.
Earlier this week AMP announced a suite of reforms to its advice business including the abandonment of BOLR agreements and institutional ownership of advice clients.
New head of advice Matt Lawler called the reforms “an important cultural change” for the 172 year old financial services provider.