AMP CEO shies away from meeting aggrieved customers as disputes roll on

AMP has failed to facilitate a single meeting or call between an aggrieved customer of a banned adviser and its chief executive Francesco De Ferrari.

Adam Check is an AMP customer fighting for remediation. Picture: Britta Campion

AMP has failed to facilitate a single meeting or call between an aggrieved customer of a banned adviser and its chief executive Francesco De Ferrari, as the wealth group sticks to an overall $778m customer compensation tally.

The AMP approach appears to be different to that of the major banks, which — after being lambasted at the Hayne royal commission in 2018 — have facilitated scores of CEO and customer meetings for those in long-standing disputes.

Adam Check, the former Sydney Children’s Hospital Foundation chief executive and now an adviser in the not-for-profit sector, has a long-running case with AMP over poor advice he received from one its planners dating back to at least 2015.

His matter is still being assessed by the group’s customer advocate, even after the corporate regulator in 2018 banned Mr Check’s planner, Graeme Cowper, from the industry for four years.

Mr Check has sought meetings with Mr De Ferrari and AMP chairman David Murray numerous times over the past 18 months, only to be referred back to the customer advocate.

His last letter to AMP’s board and Mr Murray was in late March. It asked for them to “directly intervene” in the matter to ensure any breach reports were made to regulators and that he received a timetable for resolution.

“My intent to meet with the chair and the CEO reflects the integrity and professionalism to which I have approached this personal matter,” Mr Check said.

“To not receive any (direct) response or communication, despite the damning and potentially far-reaching documentation I have wilfully provided, is disrespectful and a long way from being open and transparent with customers.

“As a result of being honest and professional in my dealings with AMP, I have received little more than ambiguity, along with disparaging and inflammatory correspondence. My numerous re­quests to meet with the chair and CEO seeks to get an explanation to this behaviour. If it is to change, it will only be from the top.”

The Australian revealed details of Mr Check’s case on Wednesday, including evidence of a review of his files in 2015 which highlighted that he received inappropriate advice. His dealings with the adviser, who worked within an AMP division, led to the forced sale of his home in 2014.

AMP CEO Francesco De Ferrari. Picture: Britta Campion

Mr De Ferrari took the reins as AMP CEO in late 2018 and has outlined a three-year transformation plan, seeking to fix compliance issues and reset the company, including making it more customer-centric.

While Mr De Ferrari has engaged with customers across AMP while in the role, it is unclear how many he has met or spoken to that have long-standing remediation cases with the company. Matters being assessed by the advocate reflect those that are not able to be resolved through the broad remediation program.

An AMP spokesman said the company’s customer advocate function was established in 2017 to support clients with complaints related to any AMP products or services that have not been resolved through the usual resolution processes.

“Since July 2018, we can confirm only a very small number of clients have sought the assistance of the AMP customer advocate in relation to their client remediation outcome,” he said.

“We remain committed to remediating clients as quickly as possible and remain on track to complete the program in 2021. Our total remediation cost remains broadly in line with our original estimate and we will continue to update the market at key reporting dates, including at our half-year results in August.”

AMP and the big banks are in the process of repaying customers a combined tally of as much as $10bn for failures across the advice industry and pressure-selling of banking products.

AMP has set aside $778m for its remediation program, including costs, which takes into account an increase in the latter half of 2019 for charges relating to inactive financial advisers.

Shaw and Partners analyst Brett Le Mesurier thinks there is a risk AMP will need to raise its charges for remediation, in line with the trend at the major banks.

“We’ve seen the major banks report additional client remediation costs in the first-half 2020, and their provisions have been much higher than AMP so it’s reasonable to expect further client remediation costs could be coming from AMP in their first-half 2020 result,” he said.

“It should be remembered that (AMP) client remediation costs increased for the first-half 2019, which does suggest that it’s not all over. Until AMP completes the sale of its life insurance business capital is a concern.”

Merlon Capital Partners principal Hamish Carlisle has a different view, saying AMP has taken a thorough approach to remediation charges.

“They have been much more conservative than others (on remediation),” he said.

For AMP, “it is more than just sampling. They have been through every file.”