The Australian Federal Court ruled in a class action lawsuit filed against AMP subsidiary AMP Financial Planning in 2020 over the controversial Buyer of Last Resort (BOLR) regime change by high net worth individuals. has entered judgment in favor of the Advisors in connection with the decision of
Judge Mark Mosinski ruled Wednesday morning in favor of the class action group, noting that AMP’s immediate effect changes were not authorized under the Legislative, Economic and Product (LEP) provisions and were “ineffective.” ” was certified.
In its filing with the ASX, AMP said: “AMP is filed on behalf of an advisory business licensed by AMP Financial Planning Pty Limited (AMPFP) on 8 August 2019. We acknowledge today’s decision by the Australian Federal Court in respect of the legal proceedings.The legal proceedings have been challenged.”Some changes AMPFP made to the Last resort purchaser (BOLR) policy in August 2019 take effect. sex. ”
“The court today ruled in favor of the principal applicant and members of the sample group.”
The lead applicant, Equity Financial Planners, is entitled to damages in the aggregate of $813,560, and sample group member Wealthstone is entitled to damages in the aggregate of $115,533.51. The court acknowledged that further processing was required to determine the impact on other group members.
In its response, AMP added that it noted the complexity of the issue and was reviewing the ruling in detail to determine its full effect and next steps.
“AMP will provide an update in due course.”
In July 2020, AMP announced that it had filed a class action lawsuit against its subsidiary, AMP Financial Planning, in the Australian Federal Court.
The lawsuit was filed by advisers who allege that a large asset firm failed to provide adequate notice before valuing its customers’ book values under the BOLR contracts.
In short, the BOLR Policy forms part of the contractual relationship between AMPFP and the financial planning practices within its network, which at the time of the change consisted of 542 practices.
The policy gives practitioners the opportunity to sell their registration rights back to AMPFP with 12 months’ notice, which was valued at four times recurring revenue prior to the change in August 2019.
On August 8, 2019, AMPFP changed its recurring revenue multiple from 4x to 2.5x.
Grandfather’s earnings plan has also changed from 4x to 1.42x, with plans to continue lowering the monthly figure until it hits zero by January 2021.
Back in 2020, an AMP spokesperson told IFA that the group believes the changes made to the BOLR contract comply with the provisions of the law and are “in the long-term interests of its clients and advisors.” rice field.
“The financial advice industry has changed dramatically over the last few years, including the elimination of traditional fees, new compulsory education standards and higher advice standards,” the spokesperson said.
“AMP has made difficult but necessary decisions to ensure that it adapts to the new environment and continues a strong and viable advice business for its clients,” the spokesperson added. “We recognize that this change will be difficult for many within our advisor network and are providing support to our advisors, including those advocating for class action lawsuits, in managing the transition.”