ASIC takes action against AMP for alleged failures relating to insurance advice

ASIC takes action against AMP for alleged failures relating to insurance advice

The Australian Securities and Investment Commission (ASIC) has taken embattled financial planners AMP to the Federal Court on Wednesday afternoon, claiming AMP financial planners were engaged in 'rewriting' conduct.

The corporate watch dog alleges AMP has breached its obligations under the Corporations Act after claiming financial planners provided advice that results in the cancellation of the client's existing life, trauma, and income protection policies and then taking out similar replacement policies by way of a new application rather than by way of transfer.

As such, the financial planners stood to receive higher commissions than they would've received under a transfer, but exposed clients to a number of risks.

The watchdog says that this type of advice allegedly given to AMP clients was inappropriate.

In the Federal Court, ASIC claims that by 1 July 2013 the financial planning firm ought to have known that this conduct was occurring but didn't take any reasonable steps to curtail the conduct of its financial planners.

One of the financial planners under ASIC's microscope for allegedly having conducted 'rewriting' is Rommel Panganiban, who was permanently banned from ASIC in September 2016.

The penalty for engaging in this type of conduct is $1 million per contravention.

The proceeding is listed for a direction hearing in Sydney on 27 July 2018.

These latest allegations follow the widely publicised condemnation of AMP by ASIC relating to its fees for no service conduct that came out during the Royal Commission into the finance and banking sector.

ASIC says it continues to separately investigate AMP in relation to the fees for no service conduct.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

Pacific Fair sale puts the spotlight on buyers for Dexus’ minority stake

The Gold Coast’s Pacific Fair shopping centre, fresh from pla...

Atlassian boss pledges $1.5 billion for green investments amidst frustration over net zero chatter

Atlassian boss pledges $1.5 billion for green investments amidst frustration over net zero chatter

Atlassian co-founder Mike Cannon-Brookes may be taking the high roa...

Olivia Newton-John's Byron Bay resort sold to Twiggy Forrest

Olivia Newton-John's Byron Bay resort sold to Twiggy Forrest

Mining magnate Andrew 'Twiggy' Forrest's investment fir...

Qantas dusts off fleet to resume international flights ahead of schedule

Qantas dusts off fleet to resume international flights ahead of schedule

Qantas Airways (ASX: QAN) is gearing up to spread its wings much ea...