Embattled financial advisory business AMP Limited (ASX: AMP) has announced it will defend class actions in the wake of the Royal Commission‘s probing of its culture and the quality of its advice.
AMP was one of the targets of the Royal Commission’s probing of dodgy advice called ‘fee for no service’.
As we wrote when former CEO Craig Meller departed, many skeletons fell out of the darkest closets of AMP and the likes of Commonwealth Bank of Australia (ASX: CBA). It was alleged CBA even charged clients who had passed on.
AMP To Defend Claims
This morning, AMP said it will defend two class actions from disgruntled shareholders.
AMP said Sydney-based law firm Quinn Emanuel Urquhart & Sullivan and Melbourne’s Phi Finney McDonald have launched class actions against it in the Supreme and Federal courts, respectively.
The claims relate to the revelations which surfaced during the Royal Commission and are filed on behalf of shareholders who owned shares in recent years. AMP said it will vigorously defend the claims.
“AMP stands behind its advice business, and the value it creates for customers,” interim Chairman Mike Wilkins said in a trading update today. “However, we have been very disappointed that, in some instances, our customers have not received appropriate levels of service for the fees they have paid. We are working hard to accelerate the remediation for our customers.”
AMP also provided a quarterly trading update this morning revealing a 2% decline in assets in its local wealth management division and said the review into employee conduct is ongoing.
“The past month has been exceptionally difficult for our customers, shareholders, employees and advisers,” Wilkins said. “We recognise there is a lot to be done to restore the public’s confidence in the company, which is a priority for the Board.”
AMP’s North platform, an online service for investment and portfolio administration, experienced a 14% increase in net cashflows during the quarter, the company said. At quarter end, AMP had issued loans totalling $19.8 million, up 2%.
“AMP Capital saw strong external fund net flows particularly in real assets and AMP Bank continued its loan growth, despite a tighter market,” Wilkins added.
Since early March, AMP shares have fallen from around $5.40 to their current $4.08, according to Yahoo! Finance.
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