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Objective advice at core of new class action
A new class action will be filed in the Federal Court against a financial institution accused of providing incentives and commissions to financial advisers at the expense of providing clients with objective advice.
Objective advice at core of new class action
A new class action will be filed in the Federal Court against a financial institution accused of providing incentives and commissions to financial advisers at the expense of providing clients with objective advice.
Shine Lawyers has announced its imminent filing of a class action against AMP Life Ltd, AMP Financial Planning Pty Ltd and two subsidiaries, Charter Financial Planning Pty Ltd and Hillross Financial Planning Pty Ltd.
It has alleged that AMP Financial Planning – through authorised representatives and subsidiaries – breached its fiduciary and statutory duties to an estimated 100,000 clients by failing to provide objective financial advice.
It alleges that AMP therefore failed to act in the best interests of clients.
Shine Lawyers indicated it will also allege that AMP Life “was in knowing receipt of gains made by the sale of inflated insurance by the AMP financial advice licensees and their authorised representatives”.
The action will claim advisers were “employed” by AMP Financial Planning subsidiaries and received commissions and other incentives for recommending insurance through AMP Life.
According to the firm, the class action is open to anyone who obtained an AMP Flexible Lifetime Policy, which includes death, TPD, trauma, income protection and business protection insurance from 2013 on the recommendation of licensees and representatives from AMP Financial Planning, Charter Financial Planning and Hillross Financial Services.
Jan Saddler, the head of litigation and loss recovery at Shine Lawyers, said advisers received commissions and incentives despite knowing clients could obtain equivalent or better policies with lower premiums through other insurers.
“AMP has encouraged and incentivised its financial advisers to prioritise personal gain above their professional obligations,” she said.
“The clients, who should have been AMP’s primary concern, have been financially disadvantaged as a result,” the lawyer added – noting clients slugged with excessive premiums as deserving of compensation.
She considered it as “unacceptable that hundreds of thousands of Australians who thought they were getting objective financial advice have instead been ripped off”.
“AMP Financial Planning and its authorised representatives have breached the trust of clients who relied on their advice to make decisions about their personal insurances,” Ms Saddler concluded.
AMP has already been in legal trouble this month – the Federal Court ordered the wealth giant to pay up a $5 million penalty for failing to prevent its financial planners from engaging in insurance churn.
Just last month, the financial institution was also revealed to be placing refunds for fees for no service into new superannuation accounts instead of asking members where the money should be directed.
The new class action comes after Shine Lawyers filed a case last month against Colonial First State Investments, which claimed hundreds of thousands of fund members had their superannuation eroded by excessive insurance premiums and had not acted in the best interests of members.
The same week, Maurice Blackburn filed an action on behalf of 330,000 NAB super fund account holders that alleged breaches of super trustee duties and the causing of substantial losses for members.
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