AMP fined $14.5 million for super business advisory fees

The federal court fined AMP $14.5 million for AMP for no-service charges on its corporate super accounts.

ASIC took AMP to court last July after alleging that AMP Life (now part of the Resolution Life group) deducted the plan’s service fee from members’ accounts to provide advice to licensees.

In findings released Tuesday afternoon, the court found that between July 2015 and September 2018, the AMP deducted $356,188 in fees from 1,452 members, even though it knew the members had terminated their employment and did not could no longer access counseling services.

AMP made a $900,000 repair last November on the issue, but the court found AMP failed to investigate whether there was a systemic problem, despite numerous complaints over a long period of time.

“These members had paid a fee in exchange for access to general financial advice as part of an agreement between their employer and AMP,” ASIC said. “Upon leaving their employer, members continued to be automatically billed the counseling fee, although they no longer had access to the counseling services for which they were billed.”

In an announcement to the ASX, AMP said the penalty had already been allocated in AMP’s fiscal year 22 half-year financial statements.

“AMP acknowledges today’s decision of the Federal Court in a civil penalty proceeding brought by ASIC regarding violations regarding the plan’s historical billing of service fees.”

He added that he learned in 2018 that some AMP Flexible Super members continued to be charged plan service fees after transferring their business super plan to a retail account.

“AMP took steps to rectify the issue, self-reported it to ASIC, apologized to customers, and subsequently completed the correction for affected members.”

Among the alleged entities were licensees AMP Financial Planning, Charter Financial Planning and Hillross Financial Planning who were included in the sanction.

A total of five companies were named by the court to be responsible for the penalty, which also includes AMP Superannuation and AMP Life.

It is the second legal victory this week for the regulator after Dixon Advisory was fined $7.2 million on Monday.