AMP 'independent report' had 25 drafts

A supposedly independent report into how Australia's largest wealth manager AMP charged clients fees for services they didn't receive went through 25 draft versions with changes from the company.

AMP and the Commonwealth Bank face a grilling by the financial services royal commission over fees.

AMP and the Commonwealth Bank face a grilling by the financial services royal commission over fees.

A senior executive at the company has admitted to the banking royal commission that he marked up changes to draft versions of the Clayton Utz document while the board also made changes before it was signed off.

It was then presented to the Australian Securities and Investment Commission as an independent document last year, something group executive for Advice Jack Regan now admits he feels "a level of discomfort" about.

Among the changes was the removal of chief executive Craig Meller's name from a list of people interviewed as part of an investigation into the unlawful and deliberate decision to continue charging fees to a group of "orphan" clients for three months despite them receiving no advice services.

Counsel assisting the commission Michael Hodge presented emails suggesting it was removed because it might "attract unnecessary attention by ASIC".

That was emphasised in a new paragraph inserted after a board meeting.

"Are you saying the board met and approved changes to the report," Mr Hodge questioned.

"I believe there was a paper submitted to the board on October 16 where they approved a final round of changes, which I believe included that paragraph ... I believe there were other changes as well," Mr Regan said.

Other changes to the report included replacing the word "likely" with "possible" and adding in clarifiers like "though we have no direct evidence at this point".

Earlier Mr Regan had admitted the practice of their so-called 90-day rule and ring fencing in order to charge customers fees while not providing services was because company profits and shareholders were a higher priority than customers and obeying the law.

"It's clear that we preference the interests of shareholders in that exchange at the expense of clients and so that is a concern," Mr Regan told the commission.

He couldn't recall "specific discussions" since he became responsible for group advice in January 2017 where it was made clear to staff this behaviour was frowned upon.

Mr Regan also accepted a suggestion from Mr Hodge that AMP was misleading ASIC and customers by initially claiming the overcharging was the result of an administrative error, in order to negotiate on the compensation payable to customers.

At one point, Mr Hodge joked Mr Regan had lost count of all the times AMP misled ASIC.

"There's so many you'll have to rely on my count, I'm afraid, Mr Regan," he said.

AMP issued a statement on Tuesday evening, apologising "unreservedly" for its advice business charging customers fees where service has not been provided and "for misleading the regulator in this regard".

AMP and the nation's big four banks have paid $219 million in compensation to more than 310,000 financial advice customers charged fees for no service.

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