Australian Ethical has announced it will completely divest from AMP following revelations of "systemic prudential and cultural issues" at the royal commission.
The announcement by Australian Ethical that it will divest from AMP comes after the company received a 'first strike' at its AGM in Melbourne.
Explaining the rationale behind Australian Ethical's decision, the fund manager's head of ethics research Stuart Palmer pointed to "systemic prudential and cultural issues" revealed at the royal commission.
"There have been serious breaches of AMP’s duty to clients, including ‘fees for no service’, failure to reprimand dishonest advisers and remediate clients, and keeping clients in expensive, inappropriate, legacy products and platforms," Mr Palmer said.
"AMP knowingly and deliberately misled regulators and there is sufficient evidence to show that these breaches are not isolated incidents.
"Senior AMP leaders consciously chose to prioritise AMP’s short-term profit at the expense of clients’ best interests and compliance with the law. Evidence revealed during the royal commission demonstrates that senior executives were involved in the misconduct, despite staff voicing concerns and knowledge that their actions were in breach of their licensee duties.
"The information released by AMP since the conclusion of the most recent royal commission hearings (including at its AGM today) doesn’t give Australian Ethical reason to change the above assessment of the evidence presented to the royal commission," Mr Palmer said.
Ultimately, Mr Palmer said, AMP's actions are in breach of Australian Ethical's ethical charter – leading to the decision to divest.