I recently came across the AMP scandal in 2018 while doing a case study assignment at uni this week . After a looking a little deeper , it became clearer to me of how severe this scandal really was and how thousands of hard working Australians lost billions of dollars . AMP went as far as calling the group of customers they were scamming “the holding pen” reffered to otherwise as animals. AMP payed the price as the share price of this company has dropped over 73% in 12 months and the company is on a slow path to possible liquidation .
As a share holder of a company , it is vital to understand the enviroment of which the company operates in and whether they are acting in an ethical manner . In my opinion , ethical decision making by management will make or break a shares price growth . Investors of AMP have felt the effects of a 12 month hangover , with the price currently at $1.80 aswell as dividends cut by 10 cents due to $4 billion dollar remmision payments demanded by ASIC . This just shows how ethical decisions can be the ultimate downfall of a company , let alone its share price .
How can we learn from AMP ? Whether an investor or manager of a firm , the importance of understanding ethical decision making is critical to the overall success of a business . I advise any current investors do look into the companies they are currently holding , in particular history of business culture and positive impacts they have made in the wider community . There would be nothing worse than holding a share like AMP and losing your capital to the poor decisions made by someone else within the firm .
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Tyger Fitzpatrick , Founder YIG Australia