AMP’s now-infamous Buyer of Last Resort policy once formed the centrepiece of its adviser recruitment drives. The scheme — under which the wealth giant agreed to purchase their aligned advisers’ client books at generous multiples come retirement if they couldn’t find a preferable buyer — was the envy of authorised reps in rival dealer groups and a source of pride for its adviser network.

Decades later, it has formed the centrepiece of a seminal lawsuit in the Federal Court, which on Wednesday awarded damages to two members of the class action against AMP after finding changes made to the policy’s terms and conditions in August 2019. It is not necessarily the curtain call, with AMP and its legal advisers King & Wood Mallesons, refusing to rule out an appeal.

But for the advice firms affected, the verdict offers some vindication for their argument that the changes caused them harm and were unjustified. Those changes triggered not only a legal process but also considerable mental health fallout for those affected. A survey of 44 AMP financial advisers by the Association of Independently Owned Financial Professionals in April 2021 found 89 per cent of them claimed to have experienced a “significant increase” in stress levels. Almost half said they had experienced a decline in physical health. Some even revealed they had resorted to drug and alcohol abuse.

As former AMP planner and class member Boris Gulshanov tells this publication, “It’s a good feeling… but not going to bring back the sleepless nights and pressure.”

Many would sympathise with the plight of these small business owners, who framed their suit as a David and Goliath-style battle against a heartless big corporate. Just as clients understandably bristle when governments tinker with the rules around superannuation, undercutting their plans for retirement, so too were many AMP advisers relying on these contractual agreements for their own security and that of their families. And breaking a handshake agreement is unethical, even un-Australian.

But it’s also worth remembering the policy at the heart of the dispute was problematic long before the terms and conditions were changed. The original BOLR terms, which offered eligible practices a multiple of 4.0x recurring revenue, was not just a generous and clever recruitment pitch. It was designed to turn seemingly objective advice providers into effective distributors of AMP products, as former AMP executive Jack Regan’s testimony to the Hayne royal commission revealed.

Documents tabled with the royal commission indicated that under the BOLR policy, an adviser would only “be paid the multiplier or indeed paid anything” for a client if it was invested in products on the AMP approved product list. In other words, there was a nefarious incentive at the heart of the agreement, which arguably dented the professionalism of those subject to it.

Moreover, while the affected AMP cohort stood to lose out financially from the changes to the BOLR terms, the rest of the industry had long since moved off such old-school arrangements, or were never privy to them in the first place. Indeed, many top AMP practices made the difficult decision to effectively forfeit the BOLR arrangement and forge their own path elsewhere or as a self-licensed boutique, reading the writing on the wall. They deserve some praise for extracting themselves from a conflicted environment before it was widely revealed to the world.

The verdict shows that the complaints made by those aggrieved have been heard. Hopefully, it gives them some solace, and allows those experiencing distress to heal.

But let’s also hope it spells the end of the era of advice being seen as nothing more than a vehicle for distribution.

If you are suffering from depression, anxiety or suicidal thoughts, or you’re worried about someone else and feel that urgent professional support is needed, contact your local doctor or one of the 24/7 crisis agencies below:

Beyond Blue: 1300 22 4636 www.beyondblue.org.au
Lifeline: 13 11 14 www.lifeline.org.au
Suicide Call Back Service: 1300 659 467 www.suicidecallbackservice.org.au