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AMP FFNS remediation dismissed as factor in class action

Mike Taylor18 January 2022
Class Action

The existence of AMP Limited’s fee for no service remediation processes failed to persuade a Federal Court judge to significantly alter the terms of a class action brought against the company over the manner in which advice clients were placed into products run by AMP.

Federal Court judge, Justice Jonathan Beach late last year substantially rejected a move by AMP to have a class action against the company “de-classed” because of the complexity involved in differing circumstances impacting each affected client.

And what became clear from Justice Beach’s decision not to de-class the action against AMP was the degree to which the company’s relationship with its authorised representatives worked in terms commission payments and approved product lists (APLs).

Within Justice Beach’s reasons for his decision, said it was being alleged that the “the prospect of the receipt of commissions or incentives could reasonably be expected to influence the personal advice given to each of the applicants and group members by the AMP authorised representatives.

He noted that AMP, as the respondent, was saying that this is not a proposition which is capable of a blanket answer and will depend on matters including whether the particular AMP authorised representative who gave the advice stood to receive a commission as a result of recommending the acquisition or holding of a given product and whether there were in fact other equally suitable products available for the client in question.

Justice Beach said that AMP, as the respondent, was also relying on the existence of a remediation scheme as a basis to say that some group members could access those schemes in preference to this proceeding.

“AMP Limited currently has in place a remediation scheme which includes two ‘lookback’ programs which seek to identify and compensate clients who have suffered loss or detriment as a result of inappropriate advice from their adviser, which covers the period 1 January 2009 to 30 June 2017, or where clients have been charged an advice service fee without the provision of financial advice services or insufficient evidence of the provision of financial services, which covers the period 1 July 2008 to 31 December 2017.”

“But none of this really assists the respondents to justify any de-classing in the interests of justice,” he said.

“There is no suggestion that the claims made in this proceeding are being remediated, other than those concerning the advice service fee allegations. Further, the remediation schemes only cover the period to either June or December 2017. But the group definition in this case and the allegations cover the period to February 2021. None of this establishes that it is in the interests of justice to de-class.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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