Senator Deborah O'Neil has revealed she was told by ASIC that AMP's Buyer of Last Resort (BOLR) agreements being altered and subsequently slashing the value of advice businesses was not a priority for the regulator.
In a letter to the chair of the Parliamentary Joint Committee on Corporations Senator James Paterson, O'Neil said she would like the committee to look into BOLR agreements being slashed because she was not satisfied ASIC would be taking any action.
"In response to my letter requesting they investigate this issue ASIC has confirmed it does not consider this matter to be a priority for them," O'Neil said.
"Considering this decision, I now call on this committee to ensure for proper scrutiny of these matters for these hundreds of small businesses."
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O'Neil said that the Australian Small Business and Family Enterprise Ombudsman has received over 100 complaints from the financial advisers affiliated with AMP.
Those complaints were about the BOLR changes, AMP applying legislative changes to grandfathered commissions ahead of the legislated timeline and AMP issuing notices of termination to an estimated 205 planners.
"[The BOLR] decision has drastically devalued the businesses of many financial advisers. This was also applied retroactively to many planners who had purchased client books in good faith with this guarantee," O'Neil said.
"AMP has issued Notices of Termination to an estimated 205 planners that were assessed as being of 'lower profitability', forcing many to sell their businesses for less than one tenth of what they were worth before these changes."
At the Senate Parliamentary Joint Committee, Corporations and Financial Services O'Neil asked ASIC chair James Shipton why AMP's treatment of financial advisers was not a priority for the regulator.
"We believe with the evidence before us that this is a matter that is a commercial dispute between the parties... At this stage we do not have evidence to suggest that it is within our jurisdiction," Shipton said.
"I believe the treatment of AMP financial advisers is so egregious that it's a disincentive to get into the business," O'Neil said.
"One AMP financial planner's business was devalued by over a third due to BOLR changes.... Another told me 'I'll be walking away after five years with nothing but it is better than other planners who will walk away with substantial debt owing to AMP'. That is not a significant issue for you to investigate, Mr Shipton?"
Shipton replied that ASIC holds concerns about the accessibility of financial advice more broadly.
"We have written to Senator O'Neill to discuss the changes to our Buyer of Last Resort policy, which we announced in August last year. We have outlined the support we're providing advisers through a time of disruption across the industry which is ultimately improving outcomes for clients," A spokesperson for AMP said.
"We continue to regularly engage with advisers, the adviser associations and the Small Business and Family Enterprise Ombudsman to support advisers through the change."