Bad advice: exec’s long battle for justice from AMP

AMP is dragging the chain on compensating former customer Adam Check for a litany of errors.

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

AMP is dragging the chain on compensating former customer Adam Check for a litany of errors overseen by the wealth manager and his now banned financial adviser, and has recently resorted to blaming the COVID-19 crisis for delays that have spanned more than two years.

Documents provided to The Australian show AMP oversaw a spate of errors and ignored a number of key warning signs in relation to the shoddy financial advice provided to Mr Check, and subsequent reviews of his case.

Questions were raised about the suitability of the advice provided as far back as 2011, and Mr Check’s advice file was deemed inappropriate by AMP in 2015, according to the documents. Despite a reviewer in 2015 ticking a box that the advice was inappropriate, Mr Check was sent a letter soon after telling him the AMP unit had “not identified any areas of potential concern” in his financial planning strategies.

Mr Check was unaware of the findings until revelations about his adviser’s poor conduct started surfacing in 2015, leading him to request a copy of his files from AMP. The corporate regulator banned Graeme Cowper for four years in 2018.

Following a subsequent review initiated by AMP in 2017 as the Hayne royal commission loomed, Mr Check was then given an assurance by customer advocate Melanie Howard-McDonald that she intended to have a resolution by Christmas in 2018.

Despite public comments committing to a timely compensation process, AMP have still not provided any clear timeframe for Mr Check’s matter to be resolved and remediation to begin. Last month, Ms Howard-McDonald blamed the pandemic and reallocation of resources for adding to delays in finalisation the matter.

Mr Check, the former Sydney Children’s Hospital Foundation chief executive and now an adviser in the not-for-profit sector, endured the forced sale of his home in 2014 and a cash flow drain resulting from shoddy ­advice. As part of his own investigation into the advice from Mr Cowper, Mr Check learned his planner was receiving commission kickbacks from a mortgage broker used to help him secure a loan that tipped him over acceptable debt levels.

In Mr Check’s protracted dealings with AMP, the wealth group also inadvertently sent him the cash account statements of other customers. These were sighted by The Australian.

“I am now trapped in a duplicitous, and often aggressive, complaint process with AMP,” Mr Check said.

“I have done all the legwork for AMP, including providing the files that they claim they have never had.

“There is nothing more that I can call out or do, other than speaking publicly, to help those who don’t know, or don’t have the means, to be made right by AMP.

“These are people’s lives we’re talking about — impacted through the unconscionable conduct of AMP.”

The corporate regulator in 2018 banned Mr Cowper after a probe found “he was not adequately trained or competent to provide financial services”.

The Australian Securities & Investments Commission was damning in its assessment of Mr Cowper, saying he had a “fundamental lack of understanding” of duties and obligations under relevant laws, and gave advice to a number of customers over a six-year period that did not appear appropriate.

AMP and the major 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.

In trying to resolve his matter, Mr Check has sent and received hundreds of emails and participated in almost 20 face-to-face and phone meetings with AMP.

An AMP spokesman on Wednesday said: “We’re expediting the review of the matter and an outcome is expected soon.”

On broader customer compensation, he said AMP was “committed to putting it right” for those who had received inappropriate advice as quickly as possible.

“In February, we updated the market that our inappropriate advice review is approximately 50 per cent complete and we remain on track for 80 per cent of our remediation program to be complete by the end of 2020.

“In a small number of instances where matters are more complex the AMP customer advocate is undertaking further reviews. We are focused on completing the reviews as quickly as possible while delivering consistent and fair outcomes.”

At AMP’s annual general meeting earlier this month, chairman David Murray said given a “significant ramp up” in remediation activity the group was on track to complete its program in 2021.

AMP has repaid about $264m to customers, with $190m of that distributed in the second half of 2019.

AMP chief executive Francesco De Ferrari told the annual meeting it was the wealth manager’s priority to “get money in the hands of clients as quickly as possible”, largely beginning with those owed smaller amounts.

“We made a decision to make automatic payments for all clients with low value fees, and we felt it made sense to prioritise these clients because they would be the clients who would need it most,” he said at the time.

Mr Check in April also submitted four reports to ASIC relating to his matter with AMP and a string of potential breaches of the law.

He said AMP had indicated it would not refer matters relating to his case to regulators until the completion of the customer advocate’s investigation.

Ms Howard-McDonald, the daughter of former Prime Minister John Howard, joined AMP in 2013 and was appointed to the customer advocate role almost three years ago.

Mr Check declined an offer of compensation made by AMP in 2018, which he viewed as inadequate given it didn’t take into account the 2015 review and the wide-ranging advice and other deficiencies identified in his case.

An ASIC spokesman declined to comment directly on Mr Check’s matter, but noted the regulator hadn’t granted any reprieve to financial institutions relating to COVID-19 and remediation work.

“ASIC is giving no free passes re timing — that is, we are not anticipating COVID-19 to significantly delay the remediation programs — although we do expect that some initial operational difficulties related to COVID may have slowed down the pace of remediation at some institutions,” he said.

ASIC has over the past two years expressed frustration at the time it was taking the banks and AMP to repay customers for mistakes and wrongful conduct.

AMP — which is confronting merged class action cases due to its conduct — came under fire during the royal commission over shortcomings in its advice business and allegations it altered an independent report submitted to ASIC. The revelations led to the early exits of former CEO Craig Meller and former chairman Catherine Brenner.

Media reports this week raised new allegations about one of AMP’s financial advisers, suggesting they had cut and pasted signatures into loan contracts.

Mr Check said AMP’s public comments this year about being transparent and ramping up remediation didn’t match his experience.

“There is little doubt that I am part of broader and deeper, systemic wrongdoing at AMP, both the inappropriate advice given and now the remediation process,” he added.