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Retirement

AMP slammed again for super management

By Grace Ormsby · January 22 2020
Reading:
egg

Retirement

AMP slammed again for super management

By Grace Ormsby
January 22 2020
Reading:
egg
AMP slammed again for super management

AMP slammed again for super management

author image
By Grace Ormsby · January 22 2020
Reading:
egg
AMP slammed again for super management

AMP has hit back after yesterday’s revelation that it was placing refunds for fees-for-no-service into new superannuation accounts for affected consumers, instead of asking them where the money should go.

Yesterday, the ABC revealed that AMP had written to former clients from late 2019 to inform them it owed them money for fees taken while providing no service.

Instead of asking customers where the money should be sent, the bank instead placed the refunded fees into new AMP superannuation funds.

While the fund does not charge fees on entrance or exit, the fund does have administration and investment fees, it was noted.

The new claims come after AMP was forced to refund hundreds of millions of dollars it had taken from clients in the “fees-for-no-service” scandal uncovered during the banking royal commission.

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It’s been a troubled five years for the wealth giant, which recently brought together its banking and wealth management units in an attempt to reflect its new “client-led” strategy. 

The financial institution was first put on notice for its “dud” superannuation practices during the royal commission – with one investor making just $3.23 on his super investment in 2016. 

It also received an unenvious shonky award in 2019 for “ruined retirements” and has been under fire recently for its slowing down of insurance payments to affected superannuation trustees

In response to the latest drama, AMP wrote that it is “committed to ensuring all members are treated equitably and fairly”.

It noted that following a review of Plan Service Fees, AMP had determined that superannuation fund members who had joined an AMP corporate super plan prior to 1 July 2014 were charged a fee for services that were provided by advisers – but these services were made available free of charge for members who joined corporate plans after that date.

AMP said it had made remediation payments to customers who were charged plan service fees.

This is separate to AMP’s fees-for-no-service remediation program, it was highlighted.

“Remediating customers as quickly as possible is our priority – for members without a current AMP super account, payments were made through an eligible rollover fund.”

It claimed this was “the fastest way to return money to clients and meets the legislative requirement for the money to remain within superannuation”.

According to the wealth giant, AMP’s eligible rollover funds are “capital guaranteed” – and will maintain the starting amount deposited in the fund.

“At all times, our approach is guided by the principle of putting clients first,” the statement read.

The payment of fees by Australian consumers for services that clients are not aware of and that are not carried out is an issue still plaguing the financial services industry – with journalist James Mitchell recently querying, “Why am I paying a fee for no service?”

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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