During round seven of the royal commission, AMP’s chief executive Mike Wilkins revealed that the group had underestimated the scale of its ‘fees for no service’.
In a statement to the ASX last week, AMP confirmed a pre-tax estimate of $778 million would be spent remediating customers due to its ‘fees for no service’.
The price comes after an additional $415 million was added to the initial remediation in the groups end of financial year results.
The $415 million includes remediation for fees, inappropriate advice and lost earnings. AMP said it would provide regular updates on the costs and delivery of the program as part of its financial reporting.
AMP had previously reported to the royal commission a figure of $1.185 billion which was an early estimate based on a nine-year timeframe for remediation.
The nine-year timeline was deemed unacceptable for customers by management and the board and AMP has said the new cost is attributable to the shorter time frame.
However, AMP’s chief executive Mike Wilkins did reveal to the royal commission that even with the reduced timeline some clients would only receive remediation 17 years after being charged.
“I think the clients should have confidence in a large financial institution. It might take us a while but ultimately we will do the right thing to remediate them,” Mr Wilkins said.
As part of the overall remediation program, AMP is also investigating the provision of general advice to corporate super plans.
It said, in its release to the ASX, that given the matter which relates predominantly to small to medium corporate plans is unlikely to be a material amount.
