A number of financial advisers in Australia have turned to a commercial law firm to file a class action lawsuit against wealth giant AMP.
Around 100 former AMP advisers allege that the company did not give them adequate notice before writing down the value of their client books, as required under their buyer of last resort (BOLR) contracts, reports local industry news website IFA.com.au.
The 100 advisers’ employment was terminated during a drastic shake up of the firm’s wealth business last year.
‘No one would have signed up’
Neil Macdonald, chief executive of Australia’s Association of Financial Advisers (AFA), said that the case will revolve around the “contractual change for adequate notice” clause.
The 100 advisers believe they should have been given a one-year warning before any write-downs of business values came into force.
“There is a clause in the contract and it basically says that if there is a detrimental change [to values], AMP has to give 13 months’ notice, [and] advisers can give six or 12 months’ notice to exit before the new terms come in,” Macdonalds said.
An additional clause says that, if changes of economic, legislative or political nature are indeed detrimental, then the firm can make changes to the contracts.
He continued: “That would be the core argument – they might think they’ve got the right to change [terms] unilaterally whenever they feel like it, but obviously no one would sign up to a contract like that.”
AMP has not put out a statement on the class action, and International Adviser was not able to contact the firm for comment.
