SYDNEY: 23 November, 2023 – The Advisers Association (TAA) has responded to the announced settlement, via mediation, in the class action against AMP Financial Planning (AMP), filed on behalf of AMP financial adviser members by Corrs Chambers Westgarth (Corrs) in the Federal Court of Australia (the Court) three years ago.
The settlement is for $100 million to address all aspects of the class action, including the proposed appeal and the second tranche previously scheduled for 2024.
‘The settlement still needs to be approved by the Court, and what it means for each member of the class action individually still needs to be worked out by Corrs,’ said TAA CEO, Neil Macdonald. ‘What we can say at this stage is that it provides some closure and allows all concerned to look to the future.’
Mr Macdonald thanked TAA members and the TAA Board for their unfailing support of the class action.
‘Taking matters to court is a long process, often difficult to understand, expensive, and stressful,’ he said. ‘We extend our heartfelt thanks to our members for their enduring patience, which helped pave the way to this outcome.’
Mr Macdonald also said the outcome would not have been possible without the courage of the lead applicant, Equity Financial Planners and sample group member, Wealthstone. ‘The principals of both these practices showed enormous strength and resilience under extremely difficult circumstances,’ he said.
Mr Macdonald also acknowledged the new AMP leadership team’s part in the mediation process.‘This settlement indicates to us that AMP wants to move forward from the past.’
In July 2023, Justice Mark Moshinsky ruled in favour of the class action’s lead applicant and sample group member, finding AMP had breached the terms of its Buyer of Last Resort (BOLR) policy when it cut the amount it would pay exiting AMP advisers for their businesses from 4 times recurring revenue to 2.5 times, and an even lower multiple for grandfathered commissions.