AMP Advisors & BOLR

23 July 2020
Financial Services

Less conversation, more action helped AMP Advisors through BOLR quagmire with practical, needs focused advice.


  • Clients: financial advice businesses within the AMP Financial Planning network
  • Location: Victoria, Tasmania, New South Wales, Queensland and South Australia
  • Situation: Clients facing substantial loss (in some cases financial devastation) after purported unilateral changes made by AMP to its Buyer of Last Resort (BOLR) scheme.  Complex legal issues and lack of clarity in process.  AMP delaying and failing to meet obligations under process, impacting business value and wellbeing of principals
  • Outcome: Taking a ‘case-by-case’ approach to provide practical advice needed by specific clients (underpinned by exceptional understanding of the common and core legal issues) assisted various clients in responding to AMP and navigating the process
  • Key elements of success: understanding of each client’s problems and objectives; subject matter expertise; expert skills; pragmatic approach; trust.

On 8 August 2019 AMP announced sweeping changes to the BOLR scheme. Under BOLR, AMP Advisers have the option of selling their financial advice practice back to AMP at a pre-determined multiple.  For years, that multiple was 4X. On 8 August 2019, AMP announced it had split the revenue valued in two, reduced the multiple from 4X to 2.5X on one part, and from 4X to 1.33X and eventually zero on the other.

Overnight, based on AMP’s changes, the value of many AMP Advisers’ businesses was halved or worse.  Once debt owed to AMP Bank for the purchase of their business (based on a valuation multiple of 4X) was factored in, many were left with negative equity.

The slashing of the multiple was not the only issue facing advisers.  Their situation was compounded by a labyrinthine BOLR process (designed by AMP), widespread delays (AMP again) and key elements of the process where AMP claimed power or discretion (or both) on key elements of business valuation.

A complex set of interrelated issues was matched by significant legal complexity.  At their heart was an unduly complex contract formed by a suite of interrelated documents, some with vague, inconsistent and obtuse drafting of key elements.  This sat in the context of financial services laws and the relationship between AMP Financial Planning as Australian Financial Services licensee and AMP Advisers as authorised representatives.  

Complex contractual interpretation, intersection with the Corporations Act, questions of misleading and deceptive conduct and overarching issues of equity, made for a unwieldy legal landscape.

If AMP’s position went unchallenged, some AMP Advisers would lose everything, and AMP Advisers will be some of the biggest losers of AMP’s post-Hayne reckoning.

From shortly after the announced changes, Mackay Chapman acted for a number of AMP Advisers across Australia.  While each was facing the same challenges from AMP, each also had their own specific circumstances and issues.  

While the AMPFPA and other groups representing AMP Advisers interests were doing a lot of talking, we were acting.  

Mackay Chapman advised clients on the big-ticket items that attracted the headlines (the multiple changes) all the way down to the specific practical issues facing them.  We assisted a number in navigating the process and breaking down AMP’s double-speak.  We delivered advice and assistance that was tailored to our clients taking into account all issues, big and small, common and individual.  Our starting point was not the complex contractual interpretation at the heart of the BOLR changes – deep, incisive analysis of this and the AMP process was a given.  Our starting point was our clients – their specific problem and their objective.