Under-fire AMP exec admits to culture problems leading to customers being charged for work that never happened

Picture: Getty Images
  • AMP is under a blowtorch at the Financial Services Royal Commission.
  • A senior AMP executive admitted the company made false statements to ASIC.
  • Internal documents, including emails, were referenced in the royal commission to show the company made false or misleading statements to the corporate regulator.

Financial services giant AMP made false statements to the corporate regulator ASIC about fees it charged customers for advice not given, according to evidence in the Financial Services Royal Commission.

The commission has heard, and a senior AMP has confirmed, about a long list of letters, emails and reports showing that the company tried to keep significant information from ASIC.

Jack Regan, AMP’s Group Executive, Advice and New Zealand, agreed in the Financial Services Royal Commission that the company’s culture needed fixing.

In extensive questioning, Michael Hodge, senior counsel assisting the royal commission, pushed Regan about false information given to ASIC.

At last count, the royal commission had identified 20 false or misleading statements by AMP. Regan had agreed that each instance was either false or misleading.

Regan agreed that the company culture at AMP wasn’t “robust” and needed to significantly improve.

“There are reasons to be concerned, they show a culture not as robust as it should be,” he told the commission.

However, he didn’t believe that this applied to all areas of the company.

He said the interests of shareholders were put ahead of that of clients.

On the company’s risk culture, Regan said there were areas AMP needed to improve significantly.

“It starts with culture, it goes to governance, it goes to capability control systems,” he said.

“Culture is the invisible hand that ensures people are making the right decisions.

“It’s evident from what happened here that hasn’t happened in all cases.”

AMP has admitted it deceived the corporate regulator ASIC over fees charged to customers for financial advice they didn’t receive.

In its written submission, AMP only admitted to “possible breaches” of regulations but internal documents, including emails, were referenced in the royal commission to show the company made false or misleading statements to the corporate regulator.

AMP had an internal rule to charge fees for up 90 days to customers it inherited from its financial planner network even though it was not providing financial advice.

In questioning, Regan didn’t reject the proposition that AMP was maintaining a “fiction” with ASIC.

A Clayton Utz review into the fees charged for no service found AMP wanted to describe the problem as an “administrative error” to ASIC so that it could limit compensation claims.

One of them was a letter in 2015 to ASIC saying that an audit report found no systemic issues. This was false, Regan agreed.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.