AMP and fees for no service: the conduct the Banking Royal Commission exposed

There is a particular kind of corporate wrongdoing that only becomes visible when someone is forced to answer questions under oath. AMP's fees-for-no-service conduct was not a secret exactly — the Australian Securities and Investments Commission had been circling the issue for years — but the full picture did not emerge until the witness box at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, convened in 2018 under Commissioner Kenneth Hayne.

What came out was, by any fair reading of the public record, extraordinary: a major listed financial institution had charged clients ongoing fees for financial advice that was never delivered, had been told about this by its own lawyers, and had then made statements to ASIC that the Royal Commission found to be misleading — not once, but repeatedly.

I've covered enough royal commissions and fraud trials to know that institutional misconduct usually has a mundane explanation at its core. AMP was no different. The fees-for-no-service problem grew, the Royal Commission heard, from the way the company's advice network was structured: advisers were attached to dealer groups, clients paid ongoing service fees, and when adviser relationships ended or adviser books were transferred, no one built a reliable system to ensure the service was actually being delivered before the fee was taken. That administrative gap persisted, and the money kept flowing to AMP.

What the Royal Commission heard

The hearings in April 2018 produced several days of testimony that became some of the most-watched corporate accountability proceedings in Australian memory. AMP's then-group executive for advice, Jack Regan, appeared as a witness. So did the company's then-CEO Craig Meller, who gave evidence by video link.

The Royal Commission's counsel assisting, Rowena Orr QC, walked the hearing through a damaging sequence of documents. At issue was not only the underlying conduct — charging fees without providing services — but AMP's communications with ASIC during the regulator's own investigation into the matter. The Royal Commission heard evidence that AMP had represented to ASIC, on multiple occasions, that the fee-for-no-service problem was the result of system errors rather than deliberate decisions. Clayton Utz, engaged by AMP to conduct an independent review, had flagged to the company that some of those representations appeared to be misleading. The Royal Commission found that AMP had nonetheless made further representations to ASIC in a similar vein.

Commissioner Hayne's interim and final reports are on the public record. The Final Report, published in February 2019, made findings about AMP's conduct in terms that were unflinching. The conduct, Hayne found, was likely to have constituted misleading or deceptive conduct and breaches of the Corporations Act 2001. He referred AMP to ASIC and to the Australian Prudential Regulation Authority for consideration of further action.

The board fallout

The hearings accelerated a board and executive reckoning that was, even by the standards of post-Royal Commission corporate Australia, unusually swift.

CEO Craig Meller resigned in April 2018, while the hearings were still running. He said publicly that he had not been aware of the conduct but acknowledged it was appropriate for him to step down. Chair Catherine Brenner resigned shortly after. The company's chief legal officer also departed. Within weeks, AMP had lost its chief executive, its chair and several other senior figures.

Three of the non-executive directors on the board at the time of the relevant conduct also left during 2018. The board that emerged from that period was substantially reconstituted. Mike Wilkins served as acting CEO while the search for a replacement ran. Francesco De Ferrari was announced as the incoming CEO later that year.

The share price, which had been under pressure for some time before the Royal Commission, fell sharply in the days following the April hearings. AMP's market capitalisation took a hit from which, as a matter of public record, the company has not fully recovered in the years since. I'd argue — and this is not a particularly controversial view — that the fees-for-no-service revelations simply accelerated what was already a structural story about AMP's diminishing competitive position in wealth management. The Royal Commission was the trigger, not the underlying cause.

The ASIC civil proceedings and penalties

Following the Royal Commission's referral, ASIC commenced civil penalty proceedings against AMP Financial Planning Pty Ltd and several related AMP entities in the Federal Court. These proceedings related to the fees-for-no-service conduct itself, as well as to the misleading representations made to ASIC.

The matters were resolved through a combination of agreed facts and, in some instances, penalties imposed by the Federal Court. ASIC's published enforcement outcomes, which are on the regulator's website, record the outcomes across the various AMP entities. In total, across multiple proceedings and settlements, the penalties and remediation costs ran into the hundreds of millions of dollars. The remediation programme alone, which involved repaying affected customers, was reported by AMP in its own financial disclosures to have cost the company well over $600 million across the group — though the precise figure shifted as the remediation scope was extended and revised over successive years.

The Federal Court proceedings against AMP Financial Planning resulted in pecuniary penalties. AMP entities also paid infringement notice penalties to ASIC at earlier stages. The company cooperated with ASIC's investigations after the Royal Commission and, in its public statements, acknowledged the conduct and apologised to affected customers.

It should be said clearly: the penalties imposed were civil, not criminal. No individual at AMP was convicted of a criminal offence in connection with the fees-for-no-service conduct. The question of whether the criminal provisions of the Corporations Act could or should have been pursued against individuals was one that generated significant commentary during and after the Royal Commission, but prosecution decisions are a matter for the Commonwealth Director of Public Prosecutions, and no such charges were laid.

The misleading-ASIC dimension

Of the various findings, the one that struck hardest at AMP's institutional credibility was not the underlying fee conduct itself — bad as that was — but the evidence about what was communicated to ASIC during the regulator's review.

The Royal Commission heard that AMP had made, or caused to be made, at least 20 false or misleading statements to ASIC about the nature and extent of the fee-for-no-service problem. The Clayton Utz review, which AMP had commissioned and which should, in the ordinary course, have functioned as a corrective, instead became a document whose findings were filtered before they reached ASIC. The Royal Commission's Final Report addressed this sequence at length and in critical terms.

ASIC subsequently pursued this dimension in its civil proceedings. The Federal Court found, in proceedings that AMP did not contest in full, that AMP entities had engaged in conduct that was misleading or likely to mislead the regulator. The specific procedural history of each set of proceedings is on the Federal Court's public register and in ASIC's enforcement outcomes database — I'd encourage anyone who wants the granular detail to go to the primary sources rather than rely on summaries, including this one.

What changed at AMP after the Royal Commission

AMP's post-Royal Commission years were defined by asset sales, restructuring and an attempt to rebuild the advice business on a different footing. The company sold its life insurance operations. It separated its Australian wealth management business. It sold AMP Capital's infrastructure equity and real estate businesses. The group that exists today is considerably smaller than the one that walked into Commissioner Hayne's hearing room.

The broader legislative response to the Royal Commission — including changes to the financial advice regulatory framework, the introduction of the Financial Adviser Standards and Ethics Authority's code of ethics, and amendments to the Corporations Act — affected the entire industry, not AMP alone. That wider story is covered in our article on The Hayne Royal Commission: what it found, and what changed.

For AMP specifically, the institutional consequences were compounding. The advice network, once a distribution strength, became a liability as advisers departed and the model came under regulatory pressure. Customer numbers fell. Remediation costs continued to appear in successive half-year results. The company's credit ratings were reviewed. None of this was solely attributable to the Royal Commission, but the Commission crystallised the reputational damage in a way that made recovery harder.

Where it sits in the broader record

There is a comparison worth drawing carefully here. The conduct AMP was found to have engaged in — charging for services not rendered, and then providing misleading information to a regulator — shares a structural feature with other major Australian corporate scandals: the cover or the concealment often proved more damaging than the original act. James Hardie's management of its asbestos liability, examined in our article on James Hardie and asbestos: the compensation scandal that changed Australian corporate law, is another case in which the institutional response to a problem compounded the underlying harm.

AMP's fees-for-no-service conduct sits squarely within the broader findings of the Scandals & Reckonings that Australian financial institutions produced in the years before Hayne was appointed. The Royal Commission did not manufacture the problem; it illuminated one that ASIC had already partially identified. What the Commission added was compulsion, public testimony, and a commissioner willing to write findings in plain language.

The public record on AMP is extensive: the Royal Commission's hearing transcripts, its interim and final reports, the Federal Court judgments and consent orders, ASIC's published enforcement outcomes, and AMP's own ASX disclosures. Anyone making judgements about what happened — and what it means — should work from those documents. Secondary accounts, including this one, are only as reliable as the primary record they reflect.

The remediation programme wound down over several years. Whether every affected customer was identified and repaid in full is a question ASIC continued to monitor. The company's own disclosures acknowledged that the programme was complex and that the customer data required to fully scope it had taken time to reconstruct. As of AMP's most recent public reporting, the remediation was described as substantially complete — but the qualification 'substantially' has done a lot of work in this story.

— Colin Ashworth, Scandals & the Public Record, Brisbane