AMP fined $14.5m for corporate super advice fees

The federal court has handed AMP a $14.5 million fine to AMP for fees-for-no-service over its corporate super accounts.

ASIC took AMP to court last July after alleging AMP Life (now part of the Resolution Life Group) deducted plan service fees from member accounts to give to advice licensees.

In findings published on Tuesday afternoon, the court found that between July 2015 and September 2018 AMP deducted $356,188 in fees to 1,452 members even though it was aware the members had ceased their employment and could no longer access advice services.

AMP completed a $900,000 remediation last November over the issue, but the court found AMP failed to investigate whether there was a systemic issue, despite many complaints over a lengthy period.

“These members had been paying fees in return for access to general financial advice as part of an agreement between their employer and AMP,” ASIC stated. “On leaving their employer, the members continued to be automatically charged the advice fee, despite no longer having access to the advice services for which they were being charged.”

In an announcement to the ASX, AMP stated the penalty has already been earmarked in AMP’s FY22 half year financial statements.

“AMP acknowledges today’s decision in the federal court as part of civil penalty proceedings by ASIC in relation to breaches concerning the historic charging of plan service fees.”

It added it became aware in 2018 that some AMP Flexible Super members continued to be charged a plan service fees after transferring from their corporate super plan into a retail account.

“AMP took action to rectify the issue, self-reported it to ASIC, apologised to customers and subsequently completed the remediation of affected members.”

Among the entities alleged included licensees AMP Financial Planning, Charter Financial Planning and Hillross Financial Planning who have been included in the penalty.

In total, there are five companies named by the court for being responsible for the penalty which also includes AMP Superannuation and AMP Life.

It’s the second win in court this week for the regulator after Dixon Advisory was handed a $7.2 million penalty on Monday.