AMP hit with new Slater & Gordon class action over superannuation

A second law firm has filed a class action against financial services giant AMP.

AMP CEO Francesco De Ferrari (left) and chairman David Murray. Picture: Britta Campion

A second law firm has filed a class action against financial services giant AMP on behalf of superannuation fund members who were allegedly charged unreasonable fees.

After announcing an intention to file back in May, Slater & Gordon filed a class action on behalf of super members on Wednesday, alleging that more than 2 million Australians had been charged excessive feeds on their superannuation accounts.

It also alleges that customers failed to secure an appropriate return on cash-only investment options.

AMP shares closed up 2 per cent at $2.07 on Wednesday, the lift coming after the company’s share price hit an all-time low on Tuesday.

“Superannuation members trusted that AMP would act in their best interests at when managing their retirement savings,” Senior Associate Nathan Rapoport said.

“Instead, they charged exorbitant fees.

“Both AMP Super and NM Super, as trustees of the funds, should have taken steps to secure the best deal for members on a commercial, arms-length basis.”

He said that members who had funds deposited in cash-only investment options were short changed because they received interest rates below what a reasonable and diligent trustee could have obtained on the open market.

AMP said the proceedings would be “vigorously defended”.

“AMP and the trustees of its superannuation funds are firmly committed to acting in the best interests of their superannuation members and acting in accordance with legal and regulatory obligations,” the company said.

“We encourage any customers who have concerns to contact AMP. We have reduced the administration fees on some of our cash investment options to address the issue of negative returns in the small number of funds impacted by this issue.

“We are also compensating affected customers for lost earnings.”

The case, funded by Therium Litigation Finance, claims compensation for AMP’s conduct dating as far back as 1 July 2008.

The class action comes after AMP’s reputation was battered by the Hayne royal commission.

The royal commission heard one example of a client losing money after the cash deposit was eaten up by investment and administration fees. It also heard allegations that AMP misled ASIC in the fee-for-no-service scandal, and claims that AMP’s board had tampered with an independent report on an investigation into the scandal by law firm Clayton Utz.

The explosive revelations forced the exit of chairman Catherine Brenner and former chief executive Craig Meller.

Slater & Gordon rival Maurice Blackburn filed a class action against AMP last month, alleging super members were charged high fees. The Federal Court will now decide which of the two law firms will proceed with the class action.

AMP is facing a separate class action brought by Maurice Blackburn over disclosure obligations, after it won the right to proceed in the NSW Supreme Court, beating four other law firms who had also filed class actions on behalf of shareholders, including Slater & Gordon, Phi Finney McDonald and Shine Lawyers.

It followed AMP’s disastrous appearance at last year’s royal commission, which resulted in a share price tumble.

It’s the third class action Slater & Gordon is pursuing stemming from the royal commission.

The firm has filed a similar class actions against Commonwealth Bank and Colonial First State on behalf of super members, as well as a class action against National Australia Bank on behalf of customers who were allegedly sold useless credit card insurance.