February 5, 2020 / 6:01 AM / 5 months ago

Australia court fines AMP $3.5 million over incorrect insurance advice

FILE PHOTO: The logo of AMP Ltd, Australia's biggest retail wealth manager, adorns their head office located in central Sydney, Australia, May 5, 2017. REUTERS/David Gray/File Photo

(Reuters) - Australia’s Federal Court has ordered wealth manager AMP Ltd (AMP.AX) to pay a penalty of A$5.2 million ($3.5 million) for failing to prevent incorrect insurance advice by financial planners, the corporate watchdog said on Wednesday.

AMP is battling to steady itself a year after a public inquiry into the finance sector accused it of improperly charging fees and attempting to deceive regulators.

In June 2018, the Australian Securities and Investment Commissions accused reut.rs/372nwmu the firm’s financial planners of advising clients to cancel existing insurance policies and apply for new similar replacement policies, so as to win higher commissions.

“This penalty proceeding reflects a lamentable failure of corporate will to take the necessary steps to prevent greedy and unlawful conduct,” the court said in its judgment, which also faulted the firm’s lack of a swift and proper remedial response.

AMP admitted to the case against it in May last year.

The court is to order a review and remediation program by AMP to ensure proper compensation for the affected clients, it added.

Reporting by Niyati Shetty in Bengaluru; Editing by Clarence Fernandez

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