AMP, the Sydney-based financial services company, has admitted it deliberately misled the Australian corporate regulator ASIC over fees-for-no-service financial advice.
AMP, which has clients throughout Australia and New Zealand, has admitted to the financial services royal commission that it misled ASIC over fees charged to thousands of customers. These customers were charged for financial services that they did not receive.
“Reasons to be concerned”
During the royal commission hearing in Sydney earlier today, AMP’s head of financial advice, Anthony Regan, admitted the company put concern for profits before concern for the law. Regan said: “I think there are reasons to be concerned. I think they show a culture that’s not as robust as it should be.”
Under interrogation from senior counsel assisting, Michael Hodge, Regan elaborated: “I think the culture certainly needs to be reviewed and analysed and we are doing that. In fact, there was a review of the culture done in 2015 but I think the concerns there are obvious.”
Hodge asked Regan: “Is that type of behaviour what you mean when you say ‘a culture that is not as robust as it should be?’”
To which Regan replied: “Well it’s clear that we preferenced the interest of shareholders, in that exchange, at the expense of clients.”
The incident is part of a nation-wide scandal involving AMP and the “big four” Australian banks. Together, the companies misled, or miss-sold to, upwards of 300,000 customers, who are now eligible to be refunded a total of $216m. Around 50% of this amount is to be paid by Commonwealth Bank, for charges for financial advice that was never given.
Further undermining confidence in the Australian financial services industry, the commission revealed that only 35% of financial advisers had informed ASIC that they had a university degree of bachelor level or above. New advisers must be in possession of a university degree and pass an exam to gain entry into the profession.