Former AMP financial advisors are suing in a class action lawsuit, claiming a policy change has left them bankrupt.
Corrs Chambers Westgarth, a commercial legal company dealing in business law, filed it in Melbourne’s Federal Court on Tuesday.
Last August, the wealth organization modified the terms of long-term contracts with its financial advisers. Affected firms lost about a third of their value, leaving many in debt. AMP used to buy departing financial advisors’ customer books for four times yearly income, but that was reduced to 2.5 times to save money.
Policy Affecting Financial Advisers
The unexpected policy move impacted over 1000 former financial advisors, according to a Finance Sector Union representative. Only a class action could get them back.
Mr. Rees said the AMP hasn’t budged from the chairman and CEO down in his speech. If they want to improve their business reputation in Australia, they shouldn’t treat their business partners like this. It has been a long time since I’ve seen a company do anything special, but this is a real gem.
AMP told the ASX that it was sure about the things it did last year and would fight the case. Fifty advisers have met with a spokesman to talk about the changes.
When David Haseldine said his 11-year relationship with AMP ended, he said his $400,000 business was worthless. He has agreed to join the class action.
It can be hard to figure out how to feed yourself and your family when you retire, says Mr. Haseldine.
AMP asked Mr. Haseldine to sign a contract that would have kept him out of business for three years. He didn’t do it and now has another company.
A friend of mine told me in June that AMP would act this way, and I didn’t believe them for a second. It’s a company that doesn’t have any morals or ethics.
Harsher Laws for Litigation Sponsors
Liberal MP Tim Wilson said he would ask AMP about its changes to the Buyer of Last Resort (BOLR).
Labor MP Deborah O’Neill wants a comprehensive parliamentary probe so advisors may discuss their work on the record.
On Tuesday, Sen. James Paterson, the chair of the joint committee on businesses and financial services, was called by someone. AMP planners who have been affected by weird BOLR changes need to be heard. It’s a big deal because it affects the financial services area, which is where we have a lot of power and work.
Last month, AMP CEO Francesco De Ferrari testified before a Senate economics committee in Australia. He praised the Treasurer’s decision to tighten regulations on litigation funders.
Mr. Rees simply considers the bottom line. Their conduct is reprehensible. Unreasonable behavior in negotiations and mediations. A single pen stroke might fix this. Restore the BOLR, then buy folks out and complete.
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