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Royal Commission – AMP Updates

AMP shareholder class actions

18 May 2018

AMP has been served with two shareholder class actions in relation to matters referred to during the Royal Commission.
AMP intends to vigorously defend these proceedings.
The first was filed by a plaintiff represented by Quinn Emanuel Urquhart & Sullivan in the Supreme Court in Sydney, on behalf of shareholders who acquired an interest in AMP’s shares between 10 May 2012 and 15 April 2018. AMP’s defence will be filed within two months.
AMP was also served with a claim filed in the Federal Court of Australia (Victorian Registry) by Phi Finney McDonald. This proceeding is on behalf of shareholders who acquired an interest in AMP’s shares between 6 May 2013 and 13 April 2018.
AMP is hopeful that other class actions, including the proceedings commenced in the Federal Court in Melbourne, can be consolidated before the NSW Supreme Court.

 


Advice Leadership changes

17 May 2018

We have announced two changes to the advice leadership team at AMP.
Pally Bargri has resigned from the role of Chief Risk Officer (CRO) for Advice.
Pally has been with AMP for just over 4 years, and has worked hard to deliver a new approach, mindset and framework for the risk and compliance activities. He has helped strengthen the governance of key advice projects and initiatives.
Pally will finish his duties as CRO on Friday 1 June. He will then provide support to the risk management team on projects such as Audit 2.0, before he officially leaves AMP in mid-July.
An internal and external search process has commenced.
Neil Swindells has decided to step back from the day-to-day running of Charter.
Neil was brought on as Managing Director (MD) last March to help strengthen the relationship with Charter advisers. The plan had always been for this to be a short-term role for Neil. The search for a new Charter MD has been underway since the beginning of the year.
Neil feels now is the right time to accelerate this plan and appoint a permanent MD. This will enable him to focus on his role as a director of advice practice boards and the Charter Licensee Board. He will also support the work AMP is doing to determine the licensee model of the future.
Chris Digby has stepped in as interim MD of Charter, extending his responsibilities to oversee the Charter, Jigsaw and SMSF Advice licensees. Chris previously led the NSW team for Charter, and is working with Neil to complete the handover.

 


Submission to the Royal Commission about fees for no service

4 May 2018

This morning we’ve published a submission to the Royal Commission to respond to the issues raised about fees for no service during its recent hearings.

We have made an ASX announcement to enable us to share the submission and speak publicly about the matter.

This is our moment to start the process of repairing trust and confidence in the value of financial advice. I know it’s been a difficult and painful time, especially for those of you dealing with challenging questions and responses from your clients. We are ready to support you and stand by you as we always have.

It’s important to say right away that in charging some customers for advice they didn’t receive, and in the way we handled the issue with ASIC, we accept we were wrong. We’ve apologised unreservedly, and our previous Chairman and CEO have stepped down.

However, in our submission to the Commission, we have said we do not accept all of the open findings made by the Commission’s Counsel Assisting. For example, we strenuously deny the allegation that in providing the report by law firm Clayton Utz to the regulator, AMP committed a criminal offence. Additionally, we’ve clarified important facts related to the Clayton Utz report, including the limited and appropriate involvement of the board.

The fees for no service issues raised in the Royal Commission were also not new. Neither were they uncovered by the Royal Commission. The regulator had been investigating them since 2015. In the past two years, we have made wide-ranging changes to processes and systems within our advice business and implemented a comprehensive program to overhaul governance and controls, so these issues never happen again.

Today, we’ve also published on our website an open letter from me to customers, apologising for our misconduct and, more importantly, setting out the actions we are taking in response. Please send the link to your clients and others you would like to reach.

Your MDs will be in touch with you directly. We all want to reassure you that AMP remains steadfast in its commitment to financial advice. We know we must work hard to win back trust in our brand, credibility with our stakeholders and confidence about our future.
Kind regards,

Mike Wilkins
Executive Chairman