In a submission to the royal commission, AMP rejected open findings by counsel assisting Rowena Orr that AMP Financial Planning and Hillross had breached the law by failing to move clients out of uncompetitive products.
Specifically, Ms Orr said the two AMP licensees had contravened section 912A(1)(a) of the Corporations Act by not doing “all things necessary to ensure the financial services licence are provided efficiently, honestly and fairly”.
Ms Orr said AMP failed to act in an efficient manner in ascertaining whether WealthView and PortfolioCare (used predominately by AMP FP and Hillross, respectively) were competitive, and AMP may have failed to act in clients’ best interests by failing to move them out of uncompetitive products.
Under questioning at the royal commission on 18 April 2018, AMP head of platform development John Keating agreed that AMP platforms WealthView and PortfolioCare were rated ‘red or ‘yellow’ in AMP’s 2013 benchmarking study, and grew increasingly less competitive in subsequent reports.
At the time, Mr Keating defended the decision to keep clients in uncompetitive platforms on the basis they could end up with worse insurance arrangements, or be adversely affected under Centrelink’s deeming rules.
The AMP submission echoed his points, adding that moving customers could result in “legislative impacts on pension schemes and tax considerations relevant to the particular customer”.
“There are reasons why customers may choose to remain in these products other than for cost competitiveness, for example insurance terms (both policy terms and pricing terms) that could not be retained if the customer moved to a different product,” said the AMP submission
“The fact that customers remain in such platform products is not evidence of inappropriate advice or any kind of misconduct.
“There is no evidence before the [royal commission] of which AMP is aware of any defects [in AMP’s benchmarking] process.
“Quite to the contrary, counsel assisting appears to rely on the Benchmarking Guidelines as reliably indicating various characteristics of products.
“It should be noted that non-AMP advisers still have customers invested in WealthView and PortfolioCare as well as AMP advisers,” said the submission.
