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Listed law firm Slater and Gordon (ASX: SGH) has launched a class action law suit against AMP (ASX: AMP) for allegedly charging customers excessive fees.
Slater and Gordon alleges that, through arrangements entered into with related parties, trustees AMP Super and NM Super paid too much to related AMP entities for administration services.
It also alleges they failed to secure an appropriate return on cash-only investment options.
The class action rides on the back of the 2018 Royal Commission into the Banking and Finance sector during which it was revealed that AMP was charging administrative fees with high costs exceeding returns and causing investment losses in some instances.
This is the second-class action launched against AMP in as many months following on from Maurice Blackburn's announcement in May.
Slater and Gordon senior associate Nathan Rapoport says AMP did not act in customers' best interests.
"Superannuation members trusted that AMP would act in their best interests at when managing their retirement savings. Instead, they charged exorbitant fees," says Rapoport.
"Both AMP Super and NM Super, as trustees of the funds, should have taken steps to secure the best deal for members on a commercial arms-length basis."
"Members whose funds were deposited in cash-only investment options were short-changed potentially thousands of dollars because they received interest rates below what a reasonable and diligent trustee could have obtained on the open market."
AMP says the Slater and Gordon class action will be "vigorously defended".
"AMP and the trustees of its superannuation funds are firmly committed to acting in the best interests of their superannuation members and acting in accordance with legal and regulatory obligations," says an AMP spokesperson.
"We have reduced the administration fees on some of our cash investment options to address the issue of negative returns in the small number of funds impacted by this issue. We are also compensating affected customers for lost earnings."
"In 2018, we cut fees on our flagship MySuper products, benefiting approximately 600,000 existing customers as well as new customers, improving member outcomes. In 2019, we also cut fees to MyNorth."
Shares in AMP are up 1.72 per cent to $2.06 per share at 1.52pm AEST.
Shares in Slater and Gordon are down 3.70 per cent to $1.56 per share at 1.27pm AEST.
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Business News Australia
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