AMP escapes charges in fees-for-no-service probe

ASIC has ended an investigation into alleged fees-for-no-service conduct by AMP after prosecutors ruled out charges.

AMP will not face criminal charges over fees-for-no service allegations. Picture: Steven Saphore

The corporate regulator has ended an investigation into alleged fees-for-no-service conduct by AMP in relation to its buyer of last resort (BOLR) policy, after the Commonwealth Director of Public Prosecutions determined no criminal charges should be laid.

The Australian Securities and Investment Commission began investigating the issue in mid-2020, following revelations in the banking royal commission.

Despite ASIC taking two briefs to the CDPP, prosecutors determined no action should be taken, although other ongoing investigations into fees for no service conduct at AMP are continuing.

“ASIC has been conducting investigations into fees-for-no service conduct by entities within the AMP Limited group, including the BOLR policy conduct which resulted in two briefs of evidence being referred to the CDPP in mid-2020,” the regulator said.

“ASIC’s investigations into other allegations of fees for no service conduct within the AMP Limited group are continuing.”

The buyer of last resort policy was a practice of AMP buying out retiring financial advisers, which the royal commission into the banks heard sometimes resulted in customers being charged for financial advice despite being “orphaned” with no adviser.

In a statement, AMP group counsel David Cullen said the business was pleased to have closure on the matter, which it acknowledges.

“AMP acknowledges the deficiencies in its historic systems and processes within the Advice business to monitor ongoing service fees in relation to BOLR,” Mr Cullen said.

“In 2018, the business completed the implementation of enhanced systems and controls to improve monitoring and reporting and to protect against recurrence.

“We have apologised to all affected clients and confirm that remediation was also completed in full in 2018.

“With today’s confirmation that no action will be taken, we are pleased to have closure on this matter.”

ASIC said it continued to pursue other enforcement investigations to ensure customers were remediated, noting it commenced civil penalty proceedings in the Federal Court in May against five AMP-related entities that allegedly charged fees to dead customers.

“ASIC continues to prioritise enforcement investigations and remediation for consumers arising out of fees for no service conduct, which, as at December 31, 2020, had seen Australia’s largest banking and financial services institutions pay, or offer to pay, $1.24 billion in compensation,” it said.

“AMP has paid over $153 million to over 200,000 customers as of that date.”