The law firm alleged that AMP trustees AMP Super and NM Super:
- paid too much to related AMP entities for administration services
- failed to secure an appropriate return on cash-only investment options
The class action is therefore claiming compensation for this conduct on behalf of the superannuation members.
It is estimated that more than 2 million people may have been affected by the “excessive fees” on their AMP superannuation accounts since 1 July 2008.
“Superannuation members trusted that AMP would act in their best interests when managing their retirement savings. Instead, they charged exorbitant fees,” Slater and Gordon senior associate Nathan Rapoport said.
“Both AMP Super and NM Super, as trustees of the funds, should have taken steps to secure the best deal for members on a commercial arms-length basis.
“Members whose funds were deposited in cash-only investment options were short-changed potentially thousands of dollars because they received interest rates below what a reasonable and diligent trustee could have obtained on the open market.”
Mr Rapoport noted that the banking royal commission had uncovered evidence of a particular group of AMP cash option members who received negative returns due to a combination of an uncompetitive interest rate and excessive fees, which the trustee was unaware of.
“These customers would have been better off keeping their retirement savings under their bed,” Mr Rapoport said.
Noting the filing of the class action, AMP issued the following statement: “AMP acknowledges that a superannuation class action proceeding has been filed against certain of its subsidiaries by Slater and Gordon.
“The proceedings will be vigorously defended.
“AMP and the trustees of its superannuation funds are firmly committed to acting in the best interests of their superannuation members and acting in accordance with legal and regulatory obligations.
“We encourage any customers who have concerns to contact AMP.”
The wealth company added that it has already reduced the administration fees on some of its cash investment options to “address the issue of negative returns in the small number of funds impacted by this issue” and is also compensating affected customers for lost earnings.
“In 2018, we cut fees on our flagship MySuper products, benefiting approximately 600,000 existing customers as well as new customers, improving member outcomes. In 2019, we also cut fees to MyNorth,” it added.
The Slater and Gordon case against AMP is the second to be filed under the litigator’s Get Your Super Back campaign that launched following the banking royal commission. The first class action launched under the campaign was against Colonial First State.
This new class action is the latest of several class actions brought against AMP.
Following the banking royal commission, five law firms filed class action lawsuits against the financial services company seeking compensation on behalf of shareholders.
The NSW Supreme Court last month selected Maurice Blackburn as the legal firm to take forward the shareholder class action against AMP for compensation following alleged breaches of the Corporations Act.
[Related: AMP could face three class action lawsuits]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.