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AMP set to face class action for allegedly ‘failing to provide objective financial advice’
Shine Lawyers is preparing to “imminently” file a class action against AMP Life Limited, AMP Financial Planning and two of its financial planning subsidiaries for allegedly prioritising profits ahead of 100,000 clients.
Jerome Doraisamy
The class action, which is to be filed in the Federal Court of Australia, will be brought against AMP Life Limited, AMP Financial Planning Pty Ltd and two of its financial planning subsidiaries, Charter Financial Planning Pty Ltd and Hillross Financial Planning Pty Ltd.
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The firm bringing the action, Shine Lawyers, will argue that AMP Financial Planning – through its authorised representative and subsidiaries – “breached its fiduciary and statutory duties to an estimated 100,000 clients by failing to provide objective financial advice, therefore failing to act in their clients’ best interests”.
The firm will further submit that AMP Life Limited “was in knowing receipt of gains made by the sale of inflated insurance by the AMP financial advice licensees and their authorised representatives”.
Advisers were employed by AMP Financial Planning subsidiaries, Charter Financial Planning and Hillross Financial Planning, Shine said in a statement, and received commissions and other incentives for recommending insurance through AMP Life.
Shine lead of litigation and loss recovery Jan Saddler commented that the advisers did all of this despite knowing that their clients could secure better or at least equivalent policies through other insurers, and with lower premiums.
“AMP has encouraged and incentivised its financial advisers to prioritise personal gain above their professional obligations. The clients, who should have been AMP’s primary concern, have been financially disadvantaged as a result,” she said.
Clients who were “slugged with excessive premiums”, Ms Saddler noted, deserve to be compensated.
“It’s unacceptable that hundreds of thousands of Australians who thought they were getting objective financial advice have instead been ripped off.
“AMP Financial Planning and its authorised representatives have breached the trust of clients who relied on their advice to make decisions about their personal insurances.”
In its statement, the firm said the action is open to anyone who obtained an AMP Flexible Lifetime Policy which includes death, TPD, trauma, income protection and business protection insurance from 2013 on the recommendation of AMP Financial Planning, Charter Financial Planning and Hillross Financial Services, as well as their authorised representatives.
The action is being funded by Woodsford Litigation Funding.
The news follows a recent order from the Federal Court that AMP pay over $5 million for failing to prevent insurance churn by its financial planners.
