InDaily

Adelaide's independent news

Support

AMP faces likely shareholder class action

News

A global law firm is investigating a possible class action against financial services giant AMP, which has admitted to cheating customers and lying to the corporate regulator.

Comments
Comments Print article

Quinn Emanuel Urquhart & Sullivan is considering taking up the challenge on behalf of shareholders after the company’s share price sank since AMP began giving testimony to the financial services royal commission last week.

AMP shares have shed more than a $1 billion in market value since then, and were down a further 0.9 per cent to $4.26 by 1116 AEST today.

Last week the 169-year-old company admitted it had charged customers fees for financial advice that was never delivered, and then repeatedly lied about its behaviour to the Australian Securities and Investments Commission (ASIC).

The wealth management giant faces possible criminal charges after the commission heard it deliberately and unlawfully continued charging fees to “orphan” clients – who no longer had an adviser – for three months despite them not receiving advice services.

Quinn Emanuel is the largest law firm globally dealing with business litigation and arbitration, according to its website, and its Australian arm says it has already secured the backing of litigation financer Burford Capital.

Quinn Emanuel partner Damian Scattini said the evidence heard on AMP’s misconduct was particularly damaging to “mum and dad” shareholders.

“The revelations of AMP’s misconduct are especially upsetting given the people who were hurt – the ordinary mums and dads … who have now lost their savings due to its dishonesty,” Scattini said today.

The global law firm is urging shareholders who acquired stock between May 2013 and April 2018 to register their interest.

On Friday, AMP chief executive Craig Meller resigned following the scandal, saying he was “personally devastated” after learning of behaviour that may yet result in staff facing criminal charges.

AMP then said it was withdrawing a proposed equity bonus for Meller, who had been set to retire at the end of the year, and that former IAG chief executive Mike Wilkins will step in as interim CEO.

AMP and the nation’s big four banks have already paid almost $219 million in compensation to more than 310,000 financial advice customers charged fees for no service.

ANZ has admitted that the growth of its financial planning business was put ahead of customers’ best interests before changes to financial advice laws.

Executive Kylie Rixon said today that the bank had changed its standards for financial planners, in part due to the increasingly onerous regulatory requirements.

She said that before the introduction of the Future of Financial Advice reforms in July 2013, ANZ Financial Planning had a culture of emphasising the growth of business more than the best interests of the client.

“Prior to 1 July 2013, when ANZ determined the financial rewards to advisers it placed greater emphasis on how the financial adviser had grown business as opposed to the quality of services provided to clients,” Rixon told the banking royal commission.

“Incentives could be achieved on an adviser’s financial performance, even if that adviser did not meet basic requirements in respect of matters such as training.”

Rixon, the chief risk officer for ANZ’s Australian wealth division, said that was no longer the case, with incentives now assessed against new factors such as client satisfaction and service delivery.

“It has taken, and continues to take, time to change this culture,” she said in a statement to the commission.

“This is especially so where this focus has existed within the financial planning industry for a long period.”

ANZ employs almost 280 financial planners through ANZFP and has another 600 who are authorised representatives through its aligned dealer group.

-AAP

We value local independent journalism. We hope you do too.

InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.

Powered by PressPatron

Comments

Show comments Hide comments
Will my comment be published? Read the guidelines.

More News stories

Loading next article