© Reuters. FILE PHOTO: The head office building of AMP Ltd, Australia’s biggest retail wealth manager, is seen in central Sydney, Australia, October 28, 2016. REUTERS/David Gray/File Photo
(Reuters) – Australia’s AMP (ASX:) tanked on Wednesday after the country’s federal court ruled against the wealth manager in class action proceedings that challenged the validity of some of the changes to its ‘buyer of last resort’ policy.
Shares of the company fell as much 7.5% to their lowest level in over a month. AMP (OTC:) was also the top loser on the benchmark index, which was last down 0.4%.
Under the changes made to the ‘buyer of last resort’ policy in August 2019, AMP re-negotiated arrangements with its financial planners to lower the amount it would pay them for their business when they retire.
The court, on Wednesday, determined amounts payable in the amount of A$813,560 and A$115,533 to the class action’s lead applicant Equity Financial Planners and sample group member Wealthstone, respectively.
AMP acknowledged the court’s decision and noted a process will be required to determine the impact of the decision on other group members of the class action suit, subject to any appeal.
“Noting the complexity of the matter, AMP is reviewing the judgment in detail to determine the full effect of the judgment and its next steps,” AMP added.
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