AMP boss steps down following admissions to the royal commission
Written on the 20 April 2018 by David Simmons
The CEO of AMP (ASX: AMP) Craig Meller has resigned following revelations about AMP's conduct at the financial services royal commission.
Meller stepped down after AMP admitted to charging customers for advice they never received and then lying to ASIC about it.
The AMP boss, who was due to retire at the end of 2018, says he is "personally devastated" about what happened under his leadership at the bank.
Whilst Meller says he was not aware of what happened, he says he ultimately takes responsibility for the outcome.
"I do not condone them or the misleading statements made to ASIC," says Meller.
"However, as they occurred during my tenure as CEO, I believe that stepping down as CEO is an appropriate measure to begin the work that needs to be done to restore public and regulator trust in AMP."
"I am personally devastated by the issues which have been raised publicly this week, particularly by the impact they have had on our customers, employees, planners and shareholders. This is not the AMP I know and these are not the actions our customers should expect from the company."
Meller will be replaced by Mike Wilkins, former IAG chief executive, on an interim basis.
Chairman Catherine Brenner says the bank is sorry and will be focusing on changing its culture.
"AMP apologises unreservedly for the misconduct and failures in regulatory disclosures in the advice business," says Brenner.
"The Board is determined that we will meet these challenges head on, accelerating changes in both culture and performance at AMP."
AMP will conduct a comprehensive review of its regulatory reporting and governance process which will be overseen by an independent expert.
The wealth management company now faces possible criminal charges after the royal commission heard it deliberately and unlawfully continued charging fees to "orphan" clients for three months, despite them not receiving advice services.
Jack Regan, group executive for advice, even admitted that one letter to ASIC claimed clients were at fault for being charged the ongoing fees, despite in some cases it being the fault of a conscious effort by AMP.
AMP together with the nation's big four banks have collectively paid nearly $219 million in compensation to more than 310,000 financial advice customers charged fees for no service in return.
AMP has personally refunded $4.7 million across more than 15,700 customers since it began cooperating with ASIC in May last year.
Shares in the finance giant have been tumbling since the company began its testimony to the royal commission on Monday, with about $1.3 billion wiped off its market capitalisation in that time.
Shares in AMP were at $4.32 per share when the market closed on Thursday afternoon.
Business News Australia
Author: David Simmons