AMP to Pay $29 Million to Settle Six-Year Commissions Lawsuit
AMP has reached an agreement in principle to settle a long-running class action over commissions paid between 2014 and 2021, agreeing to pay $29 million without admitting liability.
- Settlement covers commissions class action from July 2014 to February 2021
- Total settlement amount agreed at $29 million
- Involves AMP Limited and former advice licensee subsidiaries
- Settlement subject to Federal Court approval and deed execution
- No admission of liability by AMP in reaching settlement
Background to the Settlement
AMP Limited has announced an agreement in principle to settle a class action lawsuit concerning commissions paid for financial and insurance advice over a period spanning more than six years. The legal action, which began in 2020, targeted AMP and its former advice licensee subsidiaries, including AMP Financial Planning, Charter Financial Planning, and Hillross Financial Services, as well as Resolution Life Australasia, the insurance arm formerly known as AMP Life.
Details and Implications of the Settlement
The settlement amount agreed upon is $29 million, a figure that underscores the material financial impact of legacy legal issues for AMP. While the company has not admitted any liability as part of the settlement, the resolution signals a strategic move to close this chapter and reduce ongoing legal uncertainty. The finalisation of the settlement remains contingent on the execution of a formal deed and approval by the Federal Court of Australia, a standard procedural step in class action resolutions.
Leadership Perspective and Forward Focus
AMP’s Chief Executive, Alexis George, expressed satisfaction with the resolution, framing it as a step towards focusing on the company’s future and delivering value to customers and members. This sentiment reflects a broader industry trend where financial services firms are increasingly keen to resolve legacy disputes to concentrate resources on growth and innovation.
What This Means for Investors and the Market
For investors, the settlement provides clarity on a previously uncertain legal exposure, potentially stabilising AMP’s risk profile. However, the absence of an admission of liability leaves open questions about the company’s past practices and whether further regulatory scrutiny might follow. Market watchers will be keen to see how this settlement is reflected in AMP’s upcoming financial disclosures and whether it influences the company’s strategic priorities moving forward.
Bottom Line?
AMP’s $29 million settlement closes a costly legal chapter but leaves investors watching for what’s next.
Questions in the middle?
- Will the Federal Court approve the settlement without modifications?
- Could this settlement trigger further regulatory investigations into AMP’s advice practices?
- How will this settlement impact AMP’s financial results and investor confidence in the near term?
