Former AMP advisers who are suing the company over its alleged breach of Buyer of Last Resort contracts say the firm’s willingness to appeal the July decision shows its current management led by CEO Alexis George is a continuation of previous regimes.
On Wednesday, AMP announced it would appeal the BOLR ruling which was found in favour of AMP planners and that both parties have agreed to engage in mediation which will take place in November 2023.
David Haseldine, a former AMP adviser and class action plaintiff, says the current leadership could’ve separated itself from previous AMP management teams by accepting the court ruling.
“The two managements are nothing alike… the current management could’ve said what happened was wrong, we agree with that and we’ll make it right and AMP keeps some integrity,” Haseldine tells Professional Planner.
Anticipating a changing marketing environment post-Hayne royal commission, AMP (under former group CEO Francesco De Ferrari and domestic CEO Alex Wade) sought to change the terms of BOLR agreements from 4x recurring revenue to 2.5x with further reductions for grandfathered commissions, which led to the class action being filed in July 2020.
In a public statement, AMP group executive for advice CEO Matt Lawler emphasised the firm’s interest in pursuing an outcome through mediation.
“While we believe we have grounds on which to appeal, we also recognise the ongoing impact the proceedings are having on practices, with whom we’ve worked hard to rebuild strong and trusted relationships,” Lawler said.
“We value these relationships and that’s why we are fully committed to the upcoming mediation process in November 2023, with the aim of reaching agreement on an outcome that allows us to put this behind us.”
However, planners are yet to be convinced with another former AMP adviser in the class action, Boris Gulshanov, agreeing the decision to pursue an appeal makes no sense to him as the current management are now as culpable in the “horrendous plight of the advisers” as the old management.
“The new management had an opportunity to clean their hands of the whole matter and blame everything on the old management,” Gulshanov says.
“The fact that they did not and chose to instead participate in the same exercise means to me that it is a life-or-death scenario for AMP.”
Haseldine says he was prepared to give the current management the benefit of the doubt until the decision to appeal was made.
“Now the current management is as bad as the previous management, from my perspective,” Haseldine says.
“From a business point of view, I understand what they’ve done [it], from a moral point of view it puts them in the same bad light as the previous management who perpetrated it in the first place.”
In a media statement released after the AMP announcement, The Advisers Association (which represents AMP planners) CEO Neil Macdonald the association is “extremely disappointed” AMP chose to appeal what they believed was a conclusive judgement.
“We genuinely believe [Justice Moshinsky] already took all the matters raised by AMP into consideration,” Macdonald said.
However, he welcomed the inclusion of mediation hoping the issue is resolved quickly for the sake of past and present AMP-licensed members of TAA, as well as for AMP and its stakeholders.
“It has already been a lengthy, expensive, and stressful process for all our impacted members,” he said.
Macdonald adds to Professional Planner the association is yet to find out any specifics on the mediation process.
“Our understanding is that even the appeal has been put in, that can still be considered part of the mediation process, so it doesn’t stop the mediation process from overtaking the court process,” Macdonald says.
How far they have fallen… AMP was once a great business partner & now have done so much harm to so many. Very disappointed that AMP can’t accept the court’s decision & stop wasting shareholders money drawing out the painful process even longer.
Shame on AMP, there BDMs did an amazing job enticing advisors to sign on with the benefits associated with the decent multiples offered under their BOLR offering. Any advice that is signed on with AMP were handcuffed to them to then realise that your entire succession plan has been diminished. The new CEO should step down – conflicted and a sad reality of this punished industry. The stress that AMP advisers have gone though is unethical and hopefully there’s no more Suicides. Greedy insto! Great move for AR sentiment (not)