Isn’t it amazing … the poor things losing everything …
Well, this lot have …
-supported a government that has encouraged this sort of behaviour for decades
-they have aided and abetted the whole contracted-out engagement or agency concept as a viable component of small business, said to be the heart of the Australian economy
-they have enjoyed the trappings of wealth sourced through dubious selling tactics as exposed by Hayne
HOW much sympathy did they have for the thousands who have lost their jobs in banking and insurance before Hayne? Quite a number of them would have lost heaps
-what have they said about those who have lost their future as detailed by Hayne as a consequence of bad advice and bad practices by people like them
-what about those thousands of Australians who have lost their jobs here as their work is exported Overseas?
Now they are saying they are on the brink … they have been badly done by … and so on
Well do they deserve more? Good question
AMP financial advisers facing ruin after post-banking royal commission terminations
By The Business host Elysse Morgan
10 OCTOBER 2019
It once was the exclusive domain of politicians, journalists and real estate agents.
But in the wake of the Hayne royal commission into banking misconduct, AMP and financial planners in general, took pole position as society’s pariahs.
When it came to financial planners who actually worked for AMP, that was a combination about as toxic as you could get.
Compensation, crackdowns and overhauls
Commissioner Kenneth Hayne’s final report offers 76 recommendations, all of which the Federal Government and Labor say they will support and implement. Find out more here.
For the past few months, however, many of those small, independent advisers aligned with AMP have been living through a private hell.
As it attempted to untangle itself from the post-Hayne train wreck, AMP opted for a brutal restructure of its financial planning division.
In August it sent a shock letter to 190 planners aligned with the group, informing them they would be axed by the end of October.
Sacked advisers facing ruin
Most had bought the businesses from AMP with a promise that if they were ever forced to sell, it would be on the same terms. That is no longer the case. Many now are facing ruin.
“I feel [like] a complete failure and that I have let my family down, I am anxious and fearful for the future,” one planner wrote in an email to fellow AMP adviser John Kevin, who has been speaking to planners he is worried about.
“I have contemplated whether my life insurance is the better option for my family, for me. I have now had my will prepared so AMP can’t get a single dollar … I tell you this because I believe I’m not the only one thinking like this.”
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“AMP is robbing us,” another wrote. “I suffer ongoing mental health issues.”
“I’m not saying this lightly — a lot of people are on the edge of suicide,” Neil McDonald from the AMP Financial Planners Association said.
Mary Benton is an AMP financial planner who has not been terminated but has applied to leave.
She has been counselling about 30 planners who have been terminated.
“Even when they think they are coping, they’re not,” she said.Follow this story to get email or text alerts from ABC News when there is a future article following this storyline.Follow this story
“They’re not making good decisions, they can’t think straight.
“They are so worried about their marriages, losing their homes, how this will affect their families.
“I am trying to call as many as I can to let them know they are not alone, there are people to call, there are people in the same boat as them.
“They really believe that AMP has really tried to divide and conquer with what they are doing.”
AMP’s guarantees to advisers fall by wayside
The termination letter from AMP gave advisers an October 31 deadline to accept what has been described as “very unfair” exit terms.
The terms vary, but generally planners can either sell their business back to AMP for half of what they paid, and what has previously been guaranteed by AMP, or convince another planner, who AMP wants to keep, to buy the business and take them on as a planner.
For years AMP operated the aligned financial planning business by guaranteeing planners it would sell them businesses at four times the annual earnings of each business, but also guaranteed they would be bought back for the same amount.
It is now only offering 2.5 times annual earnings.
AMP Bank also lent planners the hundreds of thousands of dollars to buy the businesses.
Nearly all the affected advisers who have contacted the ABC have said they will be left with substantial debts as a result of AMP forcing them out.
“The deadline is less than three weeks away and they still don’t know how much AMP will pay for their business, still no answer on whether they will forgive any of the debt, or whether special consideration will be given if you are a genuine retiree,” Mr McDonald said.
If advisers fail to make a decision by October 31, AMP will cancel the planner’s licence and take back their clients, with any loans remaining payable to AMP Bank.
Another financial planner who has spoken to the ABC is under significant stress knowing that at the end of October he will have no business, an unserviceable debt of about $400,000, and a five-year office lease he cannot get out of. And he is doubtful he will be able to find another job given the state of the financial planning industry.
It is far from an isolated case
“If you were to ask me, ‘Are you OK?’, the answer is no. Not anymore. And neither is my wife. And neither is my family, ” another Sydney-based planner told the ABC.
The ABC cannot name the advisers, as AMP has confidentiality clauses in its termination letters, which advisers fear means will leave them with nothing if they speak out.
Planners left in debt
One planner has been in the industry for 10 years and bought his book of clients from AMP “back when it was a respectable, good brand, with a good reputation”.
As a migrant, he said, he worked hard in his community and brought many new clients to the business and serviced them on a fee-for-service basis.
Know more about this story? Contact Elysse Morgan
“I’ve worked so hard to build the business and we don’t live rich; we get by on around $6,000 a month including the mortgage,” he said.
“As I don’t have any employees, in our case it will just be me that loses his job, however the effect on our family is actually quite devastating.”
He said he understood many people would have little sympathy for an AMP financial planner given what came out in the royal commission, but he insisted the bad eggs were not the people AMP was getting rid of.
“AMP is terminating planners who don’t sell enough product, who don’t make enough money for AMP,” he said.
“The smaller planners like me that just charge for advice for clients who are not super rich, do a good job — that’s who AMP is terminating. I have never had one complaint or investigation into me.”
He is preparing to sell the family home, and has already pulled his children out of day care, meaning his parents have had to help.
His wife has been looking for work, but only found it in regional towns well away from the family.
The termination will leave him in significant debt, a debt AMP has said it will pursue.
“This just seems all so wrong,” he said.
AMP facing backlash
Ms Benton is one of many who have tried to contact the AMP board to make sure it is aware of what is happening, but has had no response.
“I’m incredibly worried, incredibly worried about the planners I’m speaking to,” she said.
Matters raised through her counselling and campaign are ringing alarm bells at the Small Business Ombudsman’s office.
“We are aware of the situation,” ombudsman Kate Carnell said.
“It appears that a lot of financial planners have had unfair treatment related to contracts with AMP. This is a major issue and something that we are very keen to look into.
“Those with concerns should get in contact with the office, and this can be done anonymously.”
The Financial Services Union is also in negotiation with AMP on behalf of a member and it is expected to reach a conclusion shortly.
It is also understood that a class action against AMP will be announced in the coming days and NSW Shadow Minister for Finance and Small Business, Daniel Mookhey, is also pressuring the NSW Government to investigate.
In a statement AMP said: “We care deeply about the welfare of our advisers and their families, and have offered them a range of support options including counselling.
“The decision to reset our Buyer of Last Resort (BOLR) terms for aligned advisers was a difficult but necessary change made due to the significant economic changes that have occurred across the industry.”