AMP has agreed to pay $29 million to resolve a long‑running class action over the way its aligned advisers recommended in‑house life insurance products, drawing another line under the group’s legacy advice and insurance business.
The case, launched in the Federal Court of Victoria in 2020 , alleged that advisers operating under AMP Financial Planning, Charter Financial Planning and Hillross Financial Services breached fiduciary and statutory duties owed to tens of thousands of clients by steering them towards AMP‑linked life policies on unfavourable terms.
Resolution Life Australasia, formerly AMP Life, was also named in the proceedings, which centred on the payment of commissions and the pricing of life insurance cover between July 2014 and February 2021.
Lawyers claimed that authorised representatives failed to act in their clients’ best interests by favouring AMP‑branded life products over potentially cheaper and equivalent cover available elsewhere, and that AMP did not put in place adequate systems and supervision to prevent that conduct. The claim sought compensation for alleged excess premiums, product commissions and ongoing service fees said to have been charged for advice and services which many clients did not receive.
The settlement, reached on an in‑principle basis, is subject to the execution of a deed of settlement and the approval of the Federal Court of Australia. AMP has stressed that in agreeing to settle, it has not admitted liability.
The proceedings targeted conduct during a period when commission structures, vertically integrated distribution and “in‑house product bias” were under intense regulatory and political scrutiny in Australia. For AMP and its network of advice licensees, the class action crystallised many of the issues exposed by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, particularly around conflicts of interest in product recommendations.
Shine alleged that AMP advisers prioritised the sale of AMP‑linked cover ahead of client outcomes, in some cases at inflated premiums, and that clients were not told that “they could obtain substantially equivalent or better insurance policies than the AMP life products from alternative insurers for lower premiums.”
Read next: Millions join class action against AMP
The claim group was estimated to include around 100,000 clients across the AMP Financial Planning, Charter and Hillross licensees, together with policyholders of life products issued by the then AMP Life business. The action focused on the interplay between advice remuneration, product commissions and the pricing of risk cover, rather than on individual claims handling or denial disputes.
Since the period in question, AMP has sold both its life insurance operations and its employed advice business and has repositioned as a slimmer wealth, banking and superannuation group. The company has repeatedly characterised disputes such as the Shine class action as “legacy” matters arising from business models and practices it no longer operates.
“I am pleased that we have resolved another legacy legal matter as we focus on the future and on delivering for our customers and members,” AMP chief executive Alexis George said.
For AMP’s remaining advice and superannuation distribution partners, the settlement continues a clean‑up exercise that has already seen wide‑ranging remediation programs, enforceable undertakings and changes to remuneration structures following the banning of most conflicted life risk commissions in superannuation and the tightening of best‑interests obligations.
The settlement sum of $29 million is intended to address alleged losses suffered by group members between July 2014 and February 2021, including:
premiums said to have been higher than necessary for the level of cover obtained
commissions embedded in AMP‑linked life insurance products sold during the period
ongoing service fees allegedly charged where no ongoing advice service was provided.
The precise distribution of funds will depend on the terms approved by the Federal Court, including how losses are assessed for individual clients and what proportion of the proceeds is applied to legal and administrative costs. Group members are not required to establish misconduct in their own advice files; instead, the court will assess the settlement on a class‑wide basis.
From an industry perspective, the case underlines the financial and reputational risks for licensees that allow systemic advice failures to run unchecked, particularly where conflicts of interest in product recommendation and commission structures are not adequately managed or disclosed.
The advice commissions settlement follows a much larger class action resolution earlier this year over alleged excessive fees in AMP’s superannuation business. AMP agreed to pay $120 million in relation to allegations that trustees “systematically overcharged” members of certain AMP superannuation funds between 2008 and 2020, including those in high‑fee and cash‑only products.
In that superannuation action, AMP committed to fund about $75 million of the settlement itself, with the balance to be met by insurance. As with the advice case, AMP made no admission of liability.
These outcomes come on top of a raft of separate remediation programs covering inappropriate advice, fees‑for‑no‑service and product‑related issues across AMP’s former advice network. They also sit alongside other major class action settlements, including a $100 million agreement endorsed by the Federal Court in relation to changes to AMP Financial Planning’s Buyer of Last Resort (BOLR) scheme affecting former authorised representatives.
Implications for Australian insurers and licensees
For Australian insurance professionals, the latest AMP settlement is another reminder that legacy distribution strategies and remuneration frameworks can continue to generate legal and financial fallout many years after they have been reformed or abandoned.
Key takeaways for life insurers, super trustees and advice licensees include:
Historic conflicts still matter: Even where commission structures have been overhauled, courts and claimant firms remain focused on whether past conduct met statutory best‑interests requirements and conflict‑management obligations.
Vertical integration scrutiny: Arrangements that align advice and product under a single corporate umbrella remain particularly exposed to allegations of in‑house product bias, especially if pricing and value for money can be challenged at scale.
Systems and supervision: The Shine class action emphasised not only adviser conduct, but also alleged failures in AMP’s systems and processes for monitoring and enforcing compliance with duties owed to clients. For licensees, supervisory frameworks are as critical as front‑line advice practices.
Ongoing service fees: With regulators already targeting fees‑for‑no‑service, the inclusion of ongoing advice fees in the Shine claim underscores the need for robust evidence of services delivered, particularly where clients are charged recurring amounts over many years.
For AMP, the $29 million settlement will be seen as a further step in its efforts to close off historical issues and concentrate on a reshaped business. For the broader industry, it is another case study in how legacy advice and commission models, particularly those tied to in‑house insurance products, can reverberate long after the original policies were sold.
