QUESTION 1 (LO1)
It is alleged that thousands of AMP customers have been charged for financial advice
services they have never received. Furthermore, AMP admitted to the Financial
Services Royal Commission that it misled the corporate regulator Australian Securities
and Insurance Commission (ASIC) over AMPS’s practice of charging fees for no
service. AMP also admitted to the Royal Commission that it knowingly charged
$1,300,000 in premiums for life insurance to more than 4600 superannuation
customers who were deceased. Australian Financial Review (AFR) (17th April 2018)
reported that AMP had admitted to the Royal Commission that they had paid and
received commissions which were prohibited under Future of Financial Advice which
became effective on 4th April 2018. AFR further alleged that AMP provided incentives
for commission-based sales for their financial planners. The Royal Commission also
alleged that the Chair of AMP had interfered with a report by law firm Clayton Utz that
was commissioned by AMP after self-reporting fee for no service breaches to ASIC. It
is argued that AMP had misled ASSIC twenty times about the independence of the
Clayton Utz report into AMP’s fee for no service scandal. Royal Commission further
referred AMP to the Australian Prudential Regulatory Authority for not acting in
superannuation members’ best interest.
Required:
A. Analyse the underlying reasons behind the alleged unethical practices perpetrated
by AMP. Identify and evaluate the relevant ethical codes of conduct and ethical
principles breached. Critically analyse the role of AMP’s management in alleged
unethical and unlawful practices
B. As a public company what is AMP’s goal and how alleged unethical business
practices (some of which detailed above) aligned with the goal?
C. Should AMP have aimed to generate common good in their operations? Why or
why not? Discuss.