AMP rips off customers

AMP rips off customers. Now there’s a great business plan. Charge people for financial advice and then provide no service for the next few months. That is apparently what has been said during questioning of AMP staff at the banking Royal Commission. This unfortunately is not old news. I wrote an article about this some years ago called Commonwealth bank scandal and now finally a Royal Commission has happened and banks are being questioned.

Independent contractors

As AMP financial advisors are largely independent contractors when it is time for them to move on or retire their client lists are bought back by AMP as “buyer of last resort”. In other words they have no choice. Apparently it was a deliberate decision by AMP management to continue charging fees and provide no service.

Also, when clients were moved from one advisor to another (because one retires or moves on), they were still being charged for no advice in the interim period.

Thousands of customers ripped off.

Many thousands of customers paid fees for around seven years without getting any service. One couple with an income of $200,000 paid $3,400 a year for their life insurance cover and were swapped into a product costing $55,000. That’s right, I said $55,000 per year, which is quite a respectable amount for a yearly wage.

It’s just totally outrageous and just shows the contempt AMP advisors must have had for their clients.

My AMP experience.

A few years ago I decided to go to an AMP information night for Financial Planners after I had started a financial planning course. The presentation included 3 people who had been with the company for about 1 to 2 years and the main focus was how much money it was possible to make by becoming a financial planner for AMP. One man boasted of making over $100,000 dollars after being with AMP for around 18 months. As I am a sceptic at heart, I was impressed, but wary.

After a few days I received a follow up telephone conversation from a woman in Queensland that represented AMP.  She was very keen for me to comment on the information night and I started to ask some questions. I asked where the clients come from and whether they were supplied by AMP. She then told me that AMP expected prospective employees to provide a number of referral  clients. I can’t remember exactly how many was expected but I think it was around 30-40. When I asked her how I was expected to find these clients she asked me if I had children. I said yes and that they play sports so she told me to recruite clients from the parents at sporting events or via their school.

That was enough for me. I decided to tell her that AMP did not interest me and it was also the time that finally convinced me that financial planning was not for me.

After writing this post there have been more developments. AMP has now been found to be charging dead clients. They apparently forgot to tell one widow they were still charging her husbands account after he had died.

Do it yourself.

After hearing shocking stories of deceit from a company as large as AMP, I think it brings home to me how important my message of looking after your own money is. You don’t have to do everything yourself. A good industry superannuation fund or well managed retail fund can do a lot of the decision making for you for very little cost. Here is a link to select a good Industry Superannuation fund  and also a managed retail fund via the ASX website.

Just remember that it’s Yoursavings that you are looking after and growing.