AMP’s move to jettison up to 250 financial planning practices from its advice network has prompted Australian Small Business and Family Enterprise Ombudsman Kate Carnell to call for a commitment from the organisation to enter a formal mediation process to address the situation.
“More than 80 AMP financial planners have approached my office in the past few months and many of them are telling us they face financial ruin as a result of AMP’s new exit terms,” Carnell said.
“Many of those planners who borrowed from AMP to buy into the business at a set price now face losing their homes and their livelihoods as the financial institution seeks to impose a three-year restriction on working as a financial planner,” she noted.
“My office has met with AMP and although they signalled they were open to mediation, they have yet to confirm their participation.”
According to Carnell, a formal mediation process would provide the practitioners facing exit from AMP the financial information they require to make a prudent decision about their future.
The ombudsman revealed certain requests associated with the move to cut practitioners from the dealer group have already been made.
“We’ve called on AMP to waive debts for those financial planners facing AMP-imposed reduced buyback values,” Carnell said.
“AMP has also been asked to extend its termination deadline so that a resolution may be reached.”
In making the plea to AMP, she pointed out many small financial planning businesses have suffered from activities such as restructures by banks and other organisations in the wake of the banking royal commission.
“We remain concerned about a number of behaviours that may include the conduct of lookback audits, financial planning licensors shifting responsibility for client compensation payments to licensees, short notice periods provided to licensees exiting the business and restraint of trade provisions,” she said.
In September last year, the AMP Financial Planners Association received unanimous support from its members to commence legal action against the changes AMP was making to its advisory network.
