Tuesday, Australia’s Federal court fined wealth management AMP Ltd A$14.5 million ($9.74 million) for charging clients “fees for no service” on their corporate pension accounts.
In 2018, the Australian Securities and Investment Commission (ASIC) made allegations that businesses affiliated with the wealth manager continued to charge fees to clients despite having informed them that they could no longer obtain the advice.
The court ruled that AMP businesses deducted A$356,188 in fees between July 2015 and September 2018 despite knowing that the members had quit their jobs and were no longer eligible to receive advise services.
The assertions were acknowledged by AMP, which also stated that it had self-reported the problem to the regulator in 2018 and had given affected clients remedies in November 2019.
“The court determined AMP failed to examine if there was a systemic issue, despite several complaints over a long period of time,” ASIC said. “AMP has remediated A$691,032 to affected customers,” it added.
According to AMP, the penalty that was incurred on Tuesday has already been provided for in the 2022 half-yearly financial statement.
ASIC Deputy Chair Sarah Court said, “Superannuation trustees should treat the penalty issued today as a significant reminder to maintain robust internal governance and assurance processes.”
AMP has been involved in scandals involving its business practises and corporate culture, including claims that five affiliated businesses charged more than 2,000 consumers with life insurance premiums and advising costs after they passed away.
The 172-year-old company engaged in “unconscionable” behaviour, and Australia’s largest banks breached the law when offering financial advice, according to a 2018 Royal Commission investigation.
