Shine Lawyers to hit AMP hit with new class action over insurance products

Wealth manager AMP is facing another class action lawsuit that alleges up to 100,000 clients were harmed by its misconduct.

AMP is now facing three major class actions over alleged misconduct. Picture: Hollie Adams

Shine Lawyers is poised to launch a class action against AMP claiming the wealth manager failed to provide objective financial advice and act in the best interest of its clients.

The legal action will allege AMP affiliated advisers were fuelled by incentives and commissions to push clients into AMP Life insurance products, rather than providing impartial financial advice based on client’s personal circumstances.

Shine Lawyers will also allege AMP Life was aware of the financial incentives and made significant gains from the sale of inflated insurance policies by AMP financial advice licensees and authorised representatives.

The firm is preparing to lodge the action in the Federal Court against AMP Life, AMP Financial Planning and two of its subsidiaries, Charter Financial Planning and Hillross Financial Planning.

The suit estimates around 100,000 clients were potentially impacted by the alleged breaches of fiduciary and statutory duties.

AMP said it has not yet been served with any proceedings but will “vigorously defend” itself based on the allegations made by Shine.

“We understand the proposed class action relates to the distribution of life insurance policies by AMP’s adviser network,” a spokesperson said.

“AMP has clear policies and guidelines for the distribution of life insurance policies by its adviser network, which align with legal and regulatory obligations.”

Shine Head of litigation and loss recovery Jan Saddler said advisers slugged clients with expensive premiums, while being aware there were cheaper alternatives available.

“The clients, who should have been AMP’s primary concern, have been financially disadvantaged as a result,” she said.

“It’s unacceptable that hundreds of thousands of Australians who thought they were getting objective financial advice have instead been ripped off.”

The class action will be funded through Woodsford Litigation Funding and will be available to anyone who was sold or held an AMP Life policy from 2013 by AMP Financial Planning and its affiliates.

The policies include: death, total permanent disability, trauma, income protection and business protection insurance.

It marks the third class action against AMP, after Slater and Gordon, and Maurice Blackburn lodged suits against the wealth giant in 2019.

The legal battles follow the 2018 Hayne royal commission which unveiled multiple breaches and misconducts committed by AMP.

Both Slater and Gordon and Maurice Blackburn are pursuing claims against the wealth manager’s superannuation divisions.