AMP is facing a fresh legal battle after Slater and Gordon filed a class action on behalf of more than two million superannuation customers who the law firm alleges were gouged with excessive fees.
The law firm alleges that, through arrangements entered into with related parties, trustees AMP Super and NM Super paid too much to related AMP entities for administration services.
It also alleges the troubled wealth manager failed to secure an appropriate return on cash-only investment options.
The case – funded by Therium Litigation Finance – claims compensation for this conduct dating as far back as July 2008.
“Superannuation members trusted that AMP would act in their best interests when managing their retirement savings. Instead, they charged exorbitant fees,” Slater and Gordon senior associate Nathan Rapoport said in a release on Wednesday.
“Members whose funds were deposited in cash-only investment options were short-changed potentially thousands of dollars because they received interest rates below what a reasonable and diligent trustee could have obtained on the open market.”
AMP said in a statement it would vigorously defend itself against the accusations.
“AMP and the trustees of its superannuation funds are firmly committed to acting in the best interests of their superannuation members and acting in accordance with legal and regulatory obligations,” a spokeswoman said.
“We encourage any customers who have concerns to contact AMP”.
AMP has been hit with a number of shareholder class action suits over the scandals revealed at the banking royal commission and the resulting damage to the embattled financial giant’s market value.
More than $10 billion has been wiped from the company’s value since March 2018 after the wealth manager was dragged over the coals at the royal commission, prompting a clear-out of its top brass and millions of dollars in remediation to customers.
The company was trading 1.72 per cent higher at $2.065 by 1340 AEST on Wednesday, having hit another new all-time low of $2.00 on Tuesday.
AMP’s superannuation arm last month was hit with a lawsuit by Maurice Blackburn for allegedly charging fund members “unjustifiably” high fees for an extended period of time.
AMP said on Wednesday it had reduced the administration fees on some of its cash investment options to address the issue of negative returns in the small number of funds impacted.
“We are also compensating affected customers for lost earnings,” an AMP spokeswoman said.
This is Slater and Gordon’s second class action to be filed against AMP as part of a superannuation campaign launched off the back of the banking royal commission.