AMP fed false facts to watchdog

AMP repeatedly misled the corporate cop about its efforts to end a practice where customers were charged for services they never received, the financial services royal commission has heard.

As the second round of hearings started yesterday, counsel assisting Michael Hodge, QC, highlighted AMP’s policy of snapping up clients from financial advisers.

In many cases, the financial advice titan kept charging those customers fees — in a practice going back to 2009 — even though financial planners were not looking after their affairs, Mr Hodge said.

It comes after the corporate regulator last year revealed AMP had paid or was offering compensation of $4.7 million to customers who were charged “fees for no service”.

Mr Hodge presented 10 instances of AMP making “false and misleading” statements to the regulator, the Australian Securities and Investments Commission, about efforts to clean up the problem.

Under questioning, AMP executive head of advice Anthony Jack Regan acknowledged that while his employer had blamed internal systems failures, the company had also made the decision to keep some of the client fees.

Mr Regan also agreed it was “false” when AMP, in 2015, told ASIC it had abandoned the practice the previous year.

The commission heard that when AMP brought clients on board from another adviser, it was often unable to offer the services they were previously paying for.

Mr Regan said clients without advisers were dubbed “orphan clients”, and there had been a practice of charging fees for 90 days after they were brought to AMP and added to a pool of acquired clients.