The Australian Securities and Investments Commission (ASIC) has launched Federal court action against AMP Financial Planning.
The law suit alleges AMP allowed its planners to get clients to cancel life, TPD, trauma and/or income protection insurance policies.
Rather than transferring the existing policies, they were then sold similar replacement policies.
“By advising clients to submit new applications, the financial planners stood to receive higher commissions than they would have received under a transfer, whilst at the same time exposing the clients unnecessarily to underwriting and associated risks,” ASIC said.
ASIC’s statement of claim identifies this occurring on six occasions. Each contravention is in breach of Section 961L of the Corporations Act which attracts a maximum penalty of $1 million.
ASIC will argue that AMP Financial Planning knew or ought to have known that its authorised financial planners were engaging in rewriting conduct and did nothing to stop it.
ASIC will use files from a number of AMP planners including Rommel Panganiban, who was permanently banned by ASIC from providing financial services in 2016.
The case is listed for a directions hearing in Sydney on 27 July 2018.
AMP’s reputation has taken a massive hit after it value after it admitted to the Hayne royal commission that it had charged customers fees for financial advice that was never delivered and repeatedly lied to the Australian Securities and Investments Commission about its behaviour.
AMP shares have lost more than a third of their value since March.
AMP shares yesterday lost 1.38 per cent to close at $3.57.