AMP: Misconduct not happening in NZ

AMP’s New Zealand boss says conduct issues at its Australian parent are not happening here.

AMP in Australia yesterday apologised for charging clients fees for advice they did not receive and its CEO has resigned with immediate effect.

The financial services firm has faced a grilling this week as part of a Royal Commission into Australia’s financial services sector.

The inquiry heard AMP made a deliberate decision to continue charging fees to a group of “orphan” clients for three months when they went into a central pool, despite them receiving no advice services and legal advice that it was unlawful.

The issue arose when AMP acted as a buyer of last resort, purchasing an adviser’s client book if they were unable to sell it to another authorised AMP representative.

In some cases, system errors were to blame but the inquiry heard AMP did not tell ASIC about the deliberate decision to keep charging the fees.

AMP has refunded A$4.7 million (NZ$5m) in fees to date to 15,712 affected customers.

The company said it had completed a review and the fee for no services practices ceased in November 2016.

Blair Vernon, managing director of AMP Financial Services in New Zealand, said the New Zealand arm operated with a different regulatory and governance framework to its Australian parent.

“We don’t operate the same distribution model.”

Blair said it maintained an open and transparent relationship with New Zealand regulators and had been in touch with the Financial Markets Authority and the Reserve Bank in the last week.

“In New Zealand it really is business as usual,” he said.

In a statement, AMP in Australia said it apologised “unreservedly for the misconduct and failures in regulatory disclosures in the advice business.”

The company said it would take a number of actions to ensure change at the organisation, including chief executive Craig Meller stepping down with immediate effect.

There would also be a comprehensive review of its reporting and governance processes.