ASIC has announced that AMP Financial Planning Pty Limited (AMPFP) will modify key aspects of how it provides financial advice to its customers following an ASIC investigation which revealed that of the superannuation switching advice files selected, 45% failed to adequately disclose a
reasonable basis for the advice. 

ASIC conducted an extensive surveillance of AMPFP’s operations between 1 October 2005 and 12 April 2006. During this period, ASIC reviewed 300 files selected from 30 AMP Planners
chosen at random.

ASIC’s analysis of the files (which primarily related to superannuation switching advice) and subsequent investigations found that on many occasions, AMPFP:

• planners’ files did not disclose a reasonable basis for advice;
• failed to make proper disclosures about the
  costs of acquiring the recommended product and the significant
  consequences of replacing the existing product;
• made statements on its website and in its
  Financial Services Guide that suggested AMPFP Planners could consider a
  broader range of products than permitted, which could have misled
  consumers; and
• may not have had adequate arrangements in place to  manage conflicts of interest.

The Enforceable Undertaking offered by AMPFP sets out how it intends to
rectify these issues and how it will provide suitable redress for
clients who received advice which did not have a reasonable basis.