The Post

AMP boss resigns over Australian fees scandal

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AMP in New Zealand is distancing itself from the high-profile scandal absorbing its parent company in Australia.

AMP chief executive Craig Meller has resigned with immediate effect and the Australian financial services provider has apologised ‘‘unreserved­ly’’ for serious misconduct, which came to light through a judicial inquiry.

Australia’s banking royal commission found earlier this week that AMP lied to Australia’s corporate watchdog, the Australian Securities and Investment­s Commission (ASIC), for almost a decade to cover its widespread practice of charging customers for services they did not receive.

The commission heard it had made a deliberate decision to continue to charge ‘‘orphan’’ clients financial advice fees for three

"I am personally devastated by the issues which have been raised publicly this week." AMP chief executive Craig Meller

months when they went into a central pool, often after their advisers retired.

Mike Wilkins, a non-executive director of the company, has been appointed acting chief executive while Meller’s replacemen­t is found, the company said in a statement.

A spokesman for AMP in New Zealand said it operated within a different regulatory and governance framework, with different operating and distributi­on models.

‘‘We continue to maintain an open and transparen­t relationsh­ip with New Zealand regulators – the FMA [Financial Markets Authority] and RBNZ [Reserve Bank].’’

An immediate, comprehens­ive review of AMP’s regulatory reporting and governance will overseen by a retired judge or equivalent independen­t expert.

A board committee has been establishe­d to review issues uncovered by the commission.

AMP will be making a submission to the Royal Commission to respond to the issues raised. The submission will also address the issue of the independen­ce of the report by law firm Clayton Utz into the fee-for-no-service model.

It has been reported that senior AMP figures, including chairwoman Catherine Brenner, requested changes to the ‘‘independen­t’’ report.

Brenner said: ‘‘AMP apologises unreserved­ly for the misconduct and failures in regulatory disclosure­s in our advice business. The board is determined that we will meet these challenges head on.’’

Craig Meller said: ‘‘I am personally devastated by the issues which have been raised publicly this week, particular­ly by the impact they have had on our customers, employees, planners and shareholde­rs. This is not the AMP I know and these are not the actions our customers should expect from the company.

‘‘I do not condone them or the misleading statements made to ASIC. However, as they occurred during my tenure as CEO, I believe that stepping down as CEO is an appropriat­e measure to begin the work that needs to be done to restore public and regulatory trust in AMP.’’ –Stuff

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