- A group of AMP clients still haven’t been told they received bad financial advice.
- The adviser responsible was sacked and AMP is going through his files.
- He has been reported to corporate regulator ASIC.
A husband and wife, who went to the AMP just 16 months ago to ensure their super funds were performing, were given advice which immediately cut the value of their retirement funds.
And many more AMP clients with the same adviser, who hasn’t been named, don’t even know they’ve been given bad financial advice, the financial services royal commission was told today.
Last week the financial services giant admitted making false statements to the corporate regulator ASIC about fees it charged customers for advice not given.
The CEO, Craig Meller, then resigned, citing misleading statements made to ASIC.
Today Sarah Britt, AMP’s head of compliance, faced questioning in the royal commission from Rowena Orr, senior counsel assisting the commission.
The husband, who was not named, was advised in November 2016 to place the $68,000 and $73,000 he had in two funds into MyNorth Super, an AMP fund.
This meant he had to pay an exit fee of $16,000, effectively losing about one quarter of the value of his super next egg in one of his funds.
The wife also was told to pull out her $46,000 in industry fund Vision Super and put it in the AMP fund.
Britt agreed that financial advice was “inappropriate” and to the detriment of the customer.
“That appears to be the case,” she said.
The AMP adviser, only identified as Mr E in the royal commission hearing, was sacked in August 2017. He was an authorised representative for AMP, not employed directly by the financials services company.
The commission also heard the adviser also cancelled the husband’s life insurance, leaving him without cover for there months.
A review of Mr E’s files found 8 instances of inappropriate advice out of 20 clients. All of his 67 clients are under review now.
And he has been reported to corporate regulator ASIC.
His clients have not yet been contacted for remediation.
Britt said it was not “acceptable” that they didn’t even know they may have received inappropriate advice.
“We will now need to do a file review of every single file to ascertain if there was inappropriate advice and if there was, what was the financial loss,” said Britt.
She agreed that AMP had not scaled up its remediation program as quickly as it should have.
“We under-estimated just how big that task was, and as a result we’re just not as far ahead as we should be,” Britt said.
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