Banking royal commission: AMP advisers whose advice cost clients huge amounts in savings kept their jobs
AMP fund managers whose bad advice cost clients huge chunks of their retirement savings kept their jobs despite the company’s bosses ranking them so poorly they had to beg not be fired.
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A SENIOR AMP executive has admitted failing financial advisers were allowed to limp along for months, providing advice despite costing customers thousands of dollars.
And The Daily Telegraph can reveal that one of those identified by the company as giving poor guidance is still working as a financial adviser.
AMP head of advice compliance Sarah Britt told the financial services royal commission in Melbourne yesterday financial advisers affiliated with the company were internally audited and given a rating on their advice to clients.
Advisers who did not act in the best interests of their clients were branded with an “E” rating. This meant they were issued a “show cause” letter requiring them to explain why they should remain employed.
However the commission heard one adviser dubbed “Mr E” had recommended in November 2016 that one of his clients roll over $141,000 worth of superannuation benefits from two accounts outside AMP into an AMP-owned fund called MyNorth Super. The advice saw the client lose $16,000 in exit fees from one of his funds.
Mr E was audited by AMP and given the “E” rating in March 2017. But he was allowed to continue providing advice until he was finally terminated by his employer in August 2017.
“He was relatively new and relatively junior and there was discussion ... whether he would be able to improve such that we would be able to keep him on,” Ms Britt said.
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Another financial adviser called Adam Palmer was also slapped with an”E” rating by the company, back in 2013.
Mr Palmer, who was a representative of AMP subsidiary Genesys, recommended some of his clients invest in a property company called “Property Saint”.
But Mr Palmer secretly owned a 60 per cent shareholding in that company. He eventually resigned from Genesys in 2014 and is now working as a representative of Dover Financial Advisers. Mr Palmer and Dover Financial Advisers declined to comment
AMP also admitted it had not contacted possible victims so as not to create “worry” before it examined their files.
Meanwhile, banking behemoth ANZ saw the number of bad-advice cases involving its financial advisers skyrocket from 60 in 2008 to 2499 in 2016. Counsel assisting the commission Rowena Orr presented an internal audit document revealing one out of every 20 financial planning files audited in 2015 did not meet the “customer best interest” hurdle.
ANZ’s wealth risk boss Kylie Rixon said 71 financial planners had been “performance managed” in the last year and “more than half” had left. Transgressions included not meeting compliance standards, she said.
ANZ now has 878 planners through all its entities — 500 fewer than 10 years ago.
“Clearly there have been some very concerning revelations coming out of this process so far … with the benefit of hindsight, we probably should have gone there (and called a royal commission) earlier,” he said.