Financial planning firm AMP (ASX: AMP) is staring down the barrel of yet another class action.
Shine Lawyers (ASX: SHJ) announced this morning that it was preparing to file its second class action against AMP, accusing the company of putting profits ahead of an estimated 100,000 clients.
The law firm alleges AMP Financial Planning breached its fiduciary and statutory duties to around 100,000 clients by failing to provide objective financial advice and thus failing to act in clients' best interests.
Additionally, Shine will allege that AMP Life Limited knowingly profited from the sales of inflated insurance by AMP financial advice licensees and their authorised representatives despite cheaper alternatives existing in the market.
The class action will further claim those advisers were employed by AMP Financial Planning subsidiaries, Charter Financial Planning and Hillross Financial Planning, and received commissions and other incentives for recommending insurance through AMP Life.
"AMP has encouraged and incentivised its financial advisers to prioritise personal gain above their professional obligations," says Shine head of litigation and loss recovery Jan Saddler.
Sadler says advisers did this despite knowing their clients could obtain equivalent or better policies with lower premiums through other insurers.
"The clients, who should have been AMP's primary concern, have been financially disadvantaged as a result," says Sadler.
"It is unacceptable that hundreds of thousands of Australians who thought they were getting objective financial advice have instead been ripped off."
A spokesperson from AMP says the firm intends to defend the proceedings.
"AMP and its advisers are committed to acting in the best interests of customers at all times and take these obligations seriously," says the spokesperson.
"While AMP has not been served with any proceedings, we understand the proposed class action relates to the distribution of life insurance policies by AMP's adviser network.
"Based on the information included in Shine Lawyers' media statement, AMP would vigorously defend the proceedings if served.
"AMP has clear policies and guidelines for the distribution of life insurance policies by its adviser network, which align with legal and regulatory obligations."
Shine's proposed class action is the latest in an ongoing string of lawsuits against the financial planning firm that has been slogged since the Royal Commission into the banking and finance sector.
This followed two separate class actions launched by law firms Quinn Emanuel Urquhart & Sullivan and Phi Finney McDonald regarding the same fees for no service situation.
In June 2019 Slater and Gordon (ASX: SGH) threw its own hat into the ring with a class action lawsuit, alleging the financial services company charged customers excessive fees.
Business News Australia
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