Will restoration of trust be dividend of AMP BOLR settlement?
The value of AMP Limited’s $100 million settlement of the Buyer of Last Resort (BOLR) class action against it was reflected within minutes on the Australian Securities Exchange (ASX) with the company’s shares rising six cents to 91 cents.
However, for AMP’s managing director, Advice, Matt Lawler, settlement of the long-running BOLR litigation was worth a lot more than a six cents market bounce because it effectively removes the last of the major legacy issues he inherited when he took up the AMP role in May, 2021.
The importance to Lawler of the court-related mediated settlement is that it closes the issue across all levels – those advisers who had taken BOLR payments and exited the company and those who are still practicing.
AMP noted that the settlement covered the class action in its entirety, including where there had been no judgement.
It could have been another two years before the court heard arguments around those advisers party to the class action who are still working.
AMP Limited had provisioned $50 million against settlement of the BOLR dispute and after the Federal Court’s initial finding against it decided to flag an appeal to open the way for court-directed mediation with the aggrieved financial advisers, most of whom are members of the Financial Advice Association.
Amid suggestions that settling the issue could cost as much as $500 million, the $100 million ultimately agreed between the parties looks comparatively modest.
However, speaking to Financial Newswire, Lawler declined to get into questions of whether the final settlement figure was either generous or modest.
Rather, he welcomed the fact that a settlement had been reached and that AMP could continue on its mission of rebuilding trust with its financial advisers.
This was also reflected in the formal statement issued by AMP chief executive, Alexis George, who said it allowed the company to “put this legacy matter behind us, which has impacted relationships with our valued advisers”.
Lawler said that he was aware of suggestions that settlement of the issue had dragged on but, in reality, the company had moved as quickly as the legal requirements had allowed.
For its part, The Advisers Association said the settlement provided some closure and allowed for all concerned to look to the future.
TAA chief executive, Neil Macdonald paid tribute to members who had stayed the course in the class action which was often difficult to understand, expensive and stressful.
Macdonald also said the outcome would not have been possible without the courage of the lead applicant, Equity Financial Planners and sample group member, Wealthstone.
“The principals of both these practices showed enormous strength and resilience under extremely difficult circumstances,” he said.
Macdonald also acknowledged the new AMP leadership team’s part in the mediation process.
“This settlement indicates to us that AMP wants to move forward from the past.”