AMP Superannuation, AMP Financial Planning Proprietary, AMP Services, Charter Financial Planning, Hillross Financial Services and AMP Life Ltd (which is now part of the Resolution Life Group but sat under AMP during the alleged misconduct) have been targeted by ASIC in the new court action.
The regulator has alleged the AMP companies charged advice fees to more than 15,000 customers despite being notified that those customers were no longer able to access the relevant advice.
AMP received more than $600,000 in advice fees from affected accounts, according to ASIC.
The regulator has further alleged that from July 2015 to April 2019, the AMP companies:
- deducted financial advice fees from 1,540 customers’ superannuation accounts despite being aware that the customer had left their employer-sponsored superannuation account and therefore could not access the advice for which those fees were paid;
- failed to ensure that a system was in place that did not charge customers who had left their employer-sponsored account; and
- contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly.
ASIC has sought declarations, pecuniary penalties and adverse publicity orders to be made by the Federal Court. The proceeding will be listed for a case management hearing, with a date yet to be set.
AMP recently dodged criminal action over the fees-for-no-service saga after ASIC recently decided to drop an investigation into alleged criminal conduct by AMP Financial Planning.
The regulator decided to go no further after looking into suspected misconduct, where AMP Financial Planning allegedly charged fees-for-no-service in relation to its buyer of last resort (BOLR) policy.
The new court action has followed another lawsuit commenced by ASIC against five AMP companies, for charging life insurance premiums and advice fees to more than 2,000 dead customers despite being notified of their deaths.
AMP Superannuation, AMP Life, AMP Financial Planning Proprietary and AMP Services are also subject to the proceedings, alongside NM Superannuation Proprietary.
AMP Superannuation is the trustee of two super funds: the AMP Superannuation Savings Trust and the AMP Retirement Trust.
ASIC has said it will continue to prioritise enforcement investigations and remediation for consumers arising out of fees-for-no-service conduct.
As at the end of last year, Australia’s largest banking and financial services institutions have coughed up, or offered to pay $1.04 billion in compensation, as a result of the issue.
AMP, in particular, has paid more than $153.7 million to more than 200,000 customers at the end of December 2020.
Throughout 2019, the group conducted a full remediation program covering all affected superannuation accounts in which more than $900,000 was repaid to affected customers for wrongfully charging advice fees to more than 2,500 superannuation accounts.
Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.