AMP slapped with extra conditions by Australian regulator

Pedro Gonçalves
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AMP slapped with extra conditions by Australian regulator

Australia's  largest listed wealth manager, AMP , will be subjected to additional regulator-imposed conditions when managing investment portfolios for clients, ASIC has revealed.

The corporate regulator said managed discretionary accounts are particularly risky for retail clients because the adviser can make ongoing investment decisions on the clients' behalf, without seeking the clients' approval.

ASIC did not specify what those additional conditions were but said they were part of an effort to improve the conduct and compliance standards of the industry, adding that the decision was taken following a surveillance program.

ASIC will impose licence conditions based on what an applicant is seeking authorisation for, what we know of them, and what we may see during the application assessment process"

AMP was embroiled in accusations of deception at a government-mandated inquiry into misconduct in the financial sector last year. The company subsequently lost its chairman and chief executive officer, hemorrhaged billions of dollars in funds, and is fighting to regain the trust of its customers.

ASIC commissioner Danielle Press said: "ASIC will impose licence conditions based on what an applicant is seeking authorisation for, what we know of them, and what we may see during the application assessment process. New licence applicants and licensees seeking variations can expect to see ASIC tailor licence conditions more often.''

An AMP spokeswoman said in a statement: "AMP Financial Planning is pleased it has obtained approval from ASIC to continue to support clients receiving managed discretionary account (MDA) services. It obtained this permission following the move by ASIC in 2018 to require licensees across the industry to renew their authority to provide these services. This included agreeing to implement additional controls and safeguards for MDA clients.

"Since then, AMP Financial Planning has worked constructively with ASIC and will continue to do so, as it further improves the standards of the advice industry going forward."

Adviser-operated accounts, also known as cash management accounts, allow financial advisers to monitor customers' money and make investments and payments on their behalf.