The AMP Financial Planners Association (AMPFPA) has received closed to unanimous support from its members to take legal action against the changes AMP is making to its advisory network.
A survey taken among AMPFPA members received a 90 per cent response rate, with 93 per cent of respondents saying they supported any proposed legal action.
The association has prepared legal packs for its members outlining the legal options, as well as requesting additional information from them.
“AMP is on the record saying it is trying to right some of the wrongs of the past, [but] it cannot right wrongs by doing the wrong thing by its own people,” AMPFPA chief executive Neil Macdonald said.
“Our members intend to hold AMP accountable for the severe financial, reputational and psychological harm it is inflicting on its own advisers.”
Macdonald said the changes to how AMP’s buyer of last resort (BOLR) arrangements would operate, announced on 8 August, were among the contentious issues concerning association members.
The financial services company revealed it was reducing its BOLR payouts from four times recurring revenue to a maximum multiple of 2.5.
“This action was taken without consultation with AMPFPA, without the required 13 months’ notice to advisers, and after AMP assurances that existing BOLR arrangements would not change,” Macdonald said.
The AMPFPA has written to AMP expressing its concerns about the BOLR decision and has invited the company’s senior management to a meeting to be held later this month to discuss the issue.
However, Macdonald said the response to the association’s previous letters did not give him much confidence as to how the matter is being managed.
He added it was the AMPFPA’s preference to be able to negotiate a better outcome for its members, their clients and AMP without the need for legal action.
“In the meantime, AMP should pay the agreed BOLR multiples to those who have previously provided their notice,” he said.