The Adviser Association chief executive Neil Macdonald said the size of the class was likely to be significantly more than the 100 advisers first estimated, including existing AMP Financial Planning representatives that had not been terminated by the wealth giant as part of the restructuring of its advice business last year.
“Based on what we know, a lot more people have signed up,” Mr Macdonald said.
“We know it’s not just exiting planners – some existing planners have signed up because what most of them realised is that if AMP can change the contract when they feel like it, what’s to stop them [from] changing it next year or the year after when they feel like it again?”
Mr Macdonald added that while many terminated advisers had been prepared to engage in the mediation process initiated by the small business ombudsman, an increasing number had been frustrated by the results and felt their only option was legal action.
“We think discussing and negotiating an outcome is a more efficient and better way to do things than having to go through a legal process, and a lot of our members thought that too but most of them don’t feel as though they’ve been getting a good outcome from mediation,” he said.
“The longer this goes on, the more stressful it is for them, and we know a large percentage of [the mediations] are still progressing because they’re not happy with what they’ve been offered.”
If successful, Mr Macdonald said the case would see AMP required to pay exiting planners the original book values stated in their BOLR contracts of four times recurring revenue, and that advisers still working within AMP Financial Planning could also enact their BOLR notices for the same value.
At its 2020 AGM in May, AMP indicated it had a backlog of more than 250 advice practices that had sought to enact their BOLR notices.
A spokesperson for AMP said the group was confident changes made to the BOLR contracts had followed the letter of the law as well as being “in the long-term interests of our clients and advisers”.
“The financial advice industry has transformed dramatically in the past few years, including the removal of grandfathered commissions, new mandatory education standards and higher advice standards,” the spokesperson said.
“AMP has made difficult but necessary decisions to ensure we adapt to the new environment and continue to have a strong, viable advice business for clients.
“We recognise the changes are challenging for many in our adviser network, and we’re providing support to our advisers to help them manage the transition, including those who support the class action.”
The case is being run by Corrs Chambers Westgarth as an open class action.
