The Australian federal court has ordered five current and former subsidiaries of the AMP Group to pay a total of A$14.5m (£8.5m, $9.7m, €9.7m) in penalties for having charged fees for services that were not provided.
The Australian Securities & Investments Commission (Asic) said 1,452 superannuation clients were affected.
The fees were charged to access general financial advice as part of an agreement between the members’ employer and AMP. But when the clients left the employer, they continued to be automatically charged for financial advice despite not being able to access the service.
The court found that between July 2015 and September 2018, AMP deducted A$356,188 in fees even thought it was aware the members were no longer working with their previous employer and, as a result, could not access the financial advice services.
Asic said AMP has paid A$619,032 to affected clients, but the court found that the company “failed to investigate whether or not there was a systemic issue despite many complaints over a lengthy period of time”.
The five firms involved are:
- AMP Superannuation Limited;
- AMP Financial Planning Proprietary Limited;
- Charter Financial Planning Limited;
- Hillross Financial Services Limited; and
- AMP Life Limited (which is now part of the Resolution Life Group, but was part of AMP when the misconduct occurred).
Asic deputy chair Sarah Court said: “AMP was aware it was charging fees for no service to these members but did not take the proper steps to prevent it from continuing. AMP admitted liability regarding these failures and admitted it did not have the proper systems and compliance arrangements in place to ensure the payments ceased when members left their employer.
“Superannuation trustees should treat the penalty imposed today as an important reminder to maintain robust internal governance and assurance arrangements. Trustees are responsible for ensuring they only deduct fees from member accounts for services actually provided. If they fail in this obligation, they could face significant penalties.”
As part of the judgement, AMP will be forced to publish an “adverse publicity notice” on its website for a year.
