AMP charged customers for advice it never gave — and lied about it for years

AMP was Australia's oldest financial firm — founded in 1849, demutualised in 1998, the country's biggest wealth manager. For years its advice arm billed clients ongoing 'service' fees without providing any service: customers paid for annual reviews that never happened, and AMP later admitted it had charged more than 4,600 members who were dead. An internal complaint about premiums being deducted from dead customers' accounts had surfaced as early as 2016 and was never reported to regulators.

The cover-up was what broke it. When the corporate regulator ASIC asked AMP to explain its fees-for-no-service, AMP commissioned an 'independent' review from law firm Clayton Utz — then had its own executives redraft the report 25 times before handing it over. AMP also misled ASIC roughly 20 times over two years. In April 2018 the royal commission put AMP's head of advice, Anthony Regan, in the witness box; he admitted the firm had 'preferenced the interests of shareholders at the expense of clients' and protected profitability 'at the expense of complying with the law'.

The fallout was immediate. CEO Craig Meller resigned on 20 April 2018 — the inquiry's first scalp — and chairwoman Catherine Brenner followed ten days later; AMP cut directors' pay by 25% and its general counsel left. Shares fell more than 10% that week. By August, half-year net profit had plunged 74% to A$115 million and customers had pulled A$873 million out of its wealth management arm; more than A$1 billion of market value was stripped from the company during 2018.

The reckoning continued for years. On 25 October 2018, after AMP announced it would sell its life insurance arm to Resolution Life for A$3.3 billion and exit financial advice, shares crashed 24.5% to A$2.50 as investors deserted. The Federal Court fined AMP A$14.6 million in September 2022 after ASIC sued, and by August 2022 AMP had paid back A$627 million to 331,994 customers for services never delivered. The 169-year-old blue chip that had survived two world wars never recovered its standing.