AMP boss Craig Meller’s name only one to be deleted from ‘independent’ report

Craig Meller’s name was the only one deleted from a Clayton Utz report on AMP’s fee-for-no-service scandal, inquiry hears.

AMP CEO Craig Meller. (Hollie Adams/The Australian)

AMP boss Craig Meller’s name was the only one deleted from a report by law firm Clayton Utz on its fee-for-no-service scandal, the banking royal commission has heard.

A paragraph exonerating him was added to Clayton Utz’s report after the law firm sent a supposedly final version to AMP.

The investigation was supposed to be independent, but the commission has heard evidence that AMP general counsel Brian Salter repeatedly asked for changes watering down references to the company’s former head of financial advice, Rob Caprioli.

In all, Clayton Utz provided a whopping 25 drafts of the report to AMP, the commission has heard.

Full details of the interactions between the law firm and AMP were only provided to the commission late on Sunday night and Monday morning, when the company turned up 741 previously undiscovered documents.

AMP (AMP) shares plunged in late trade, falling 4.6 per cent to $4.54.

These revelations followed testimony this morning which revealed AMP had fed the corporate regulator a “fiction” about why it was charging advisory customers fees but not providing them with any service, the banking royal commission has heard.

Giving evidence this morning, AMP head of financial planning Jack Regan said he had lost count of the number of times the company misled the Australian Securities and Investments Commission over the “fee for no service” debacle.

Mr Regan said he accepted the figure of 20 times put forward by counsel assisting the commission, Michael Hodge, QC.

And he agreed the company had put short-term profits ahead of the interests of its customers.

AMP repeatedly told ASIC that charging fees for no service was an administrative error, but emails and other documents shown to the commission over the past two days have shown that it was in fact a deliberate decision made by AMP management.

Tens of thousands of customers paid fees they should not have for at least seven years, the commission has heard.

Kenneth Hayne

Key players

Commissioner. A former High Court judge, married to current High Court judge Michelle Gordon. During the hearings he has been tough on banks slow to cough up information required by the commission and dropped hints he is concerned about whether they have a willingness to comply with the law of the land.

Rowena Orr

Key players

Senior counsel assisting the commission. A Melbourne QC with razor-sharp cross examination skills and a background focusing on the intersection between the criminal and commercial worlds.

Philip Crutchfield

Key players

Melbourne QC representing AMP. The wealth manager is in the commission’s sights in this round of hearings, which focus on the scandal-prone financial planning sector.

Matt Collins

Key players

Melbourne QC - and president of the Victorian Bar - representing ANZ. Best known for his defamation work, including representing actress Rebel Wilson in her multi-million-dollar win over Bauer Media.

Charles Scerri

Key players

CBA’s counsel is a Melbourne QC who specialises in representing the big end of town and government agencies. The bank’s well-known track record of scandal in its financial planning business is set to get another airing at the commission.

Neil Young

Key players

NAB’s long-time go-to QC is not to be confused with the Canadian singer-songwriter of the same name - but is very much a rock star at the commercial bar.

They were clients of AMP advisers, who are largely independent contractors, who had either sold their client books back to the company under a scheme known as “buyer of last resort” or had their client lists transferred to AMP in preparation for onselling them to another adviser, a process known as “ringfencing”.

In both cases, this left the client an “orphan”, without an adviser, which AMP has admitted to the commission meant it was unable to provide them with ongoing services for which they had paid, such as an annual review.

Mr Regan was taken to a letter AMP sent to ASIC in November 2015, in which it said it could “provide an assurance that a process was in place to inform customers that services would no longer be provided” once they no longer had an adviser.

This was a “fiction”, Mr Hodge said, in part because such letters were not actually sent.

Commissioner Kenneth Hayne asked Mr Regan: “Do you reject the word fiction?”

“No, I don’t reject it,” Mr Regan replied.

He said there were “reasons to be concerned” about internal AMP emails from 2015 in which executives decided to keep ringfencing going, even though they knew it was a breach of the company’s financial services license.

“I think they show a culture that’s not as robust as it should be,” he said.

“It’s clear that there’s preferencing of shareholders there at the expense of clients, so that is concerning.”

Mr Regan said he and the AMP board agreed that the company’s culture needed improvement, including in the way it dealt with the regulator.

This should be “truthfully and frankly”, he said,

“There are a number of areas where we need to improve significantly,” Mr Regan said.

“Certainly there’s areas where the risk culture needs to be improved.”