APRA has issued new licence conditions on AMP Super amid ongoing concerns over the company’s management in the wake of the Hayne royal commission.
The prudential regulator on Friday said it had issued fresh directions and conditions to AMP Superannuation Limited and NM Superannuation Proprietary Limited – collectively AMP Super – to address a range of issues identified during its ongoing supervision of the company.
Shares in the embattled wealth manager fell by a further four per cent at the open of markets and were down 3.79 per cent at $2.155 by 1045 AEST.
APRA said AMP Super will be required to make “significant changes” to its practices.
“Areas identified for improvement include conflicts of interest management, governance and risk management practices, breach remediation processes, addressing poor risk culture and strengthening accountability mechanisms,” the Australian Prudential Regulation Authority said in a release.
The action comes after AMP Super was referred to APRA following the royal commission for failing to act in its members’ interests.
The damaging inquiry heard the AMP board’s outsourcing arrangements meant it was largely unaware of the depth of its investment underperformance, and that the company was hamstrung to prevent fee gouging by related parties.
Last month AMP’s superannuation arm was hit with a separate class action lawsuit by Maurice Blackburn for allegedly charging fund members “unjustifiably” high fees for an extended period of time.
APRA’s directions issued on Friday require AMP Super to renew and strengthen its four-member board, which currently comprises of interim chairman Tony Brain, independent directors Cathy Doyle and Louise Dudley, and director Darryl Mackay.
Additionally, APRA requires AMP Super to engage an external expert to report on remediation and compliance with the new directions and conditions.
AMP said in a release it would fully implement the directions and additional conditions.
“We have been working constructively with APRA on this matter and have already taken action on a number of the issues raised,” AMP announced to the ASX.
The embattled wealth manager was one of the more prominent firms to feature at the financial services royal commission, where it faced various accusations of wrongdoing including charging clients for advice they never received.
AMP subsequently lost its chairman and chief executive officer, haemorrhaged billions of dollars in funds and was slapped with lawsuits.
Last month AMP shareholders voted in favour of the company’s remuneration report, but the leadership team says further uncertainty awaits as it embarks on a multi-year journey to lift earnings and rebuild its share price.
Shares in the company were worth $2.24 before trade on Friday, having lost more than 12 per cent of their value so far in 2019 and about 60 per cent since March last year.