Article correction: An earlier version of this article stated that ASIC’s investigation into AMP was in relation to charging fees on life insurance policies for deceased customers. This information was incorrect. The investigation centred around suspicions of criminal conduct related to charging fees to people who did not have access to a financial advisor. More detailed information can be obtained from this statement on the ASIC website.
The AMP Ltd (ASX: AMP) share price has slipped into the red this morning.
The move comes after the Australian Securities and Investment Commission (ASIC) formally ended its investigation into AMP today.
Let’s take a closer look at how it unfolded this morning.
ASIC drops its case against AMP
AMP came under fire from ASIC due to its “fees for no service” conduct that came through the Royal Commission into banking in 2017 – 2019.
The investigation centred around suspicions of criminal conduct related to charging fees to people who did not have access to a financial advisor.
Royal Commissioner Kenneth Hayne QC recommended AMP receive criminal proceedings as a result of this conduct.
However, ASIC decided there will be no criminal charges after ending its investigation into AMP today.
In a statement, ASIC stated:
The CDPP has now determined, on the basis of the available evidence and weighing the relevant public interest factors, that no charges should be brought for that conduct.
AMP also responded, claiming it “welcomes the confirmation from ASIC that it will take no action” in relation to any of the allegations.
Speaking on the issue, AMP Group general counsel David Cullen said:
AMP acknowledges the deficiencies in its historic systems and processes within the Advice business to
monitor ongoing service fees in relation to Buyers of Last Resort…We have apologised to all affected clients
and confirm that remediation was also completed in full in 2018.
Despite the outcome, investors have punished AMP shares this morning, pushing the price 1.17% into the red at the time of writing.
AMP share price snapshot
AMP shares have slipped 30% into the red this year to date, extending the last 12 month’s loss of ~38%.
Both of these returns have lagged the S&P / ASX 200 Index (ASX: XJO)’s return of ~22% over the last year.
At the time of writing, AMP has a market capitalisation of $3.6 billion.