ASIC cancels Lion Advantage's AFS licence
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services (AFS) licence of Lion Advantage and banned its chief executive David Hickie from providing financial services for two years.
The business provided financial product services to retail clients and acted as responsible entity, operating four registered managed investment schemes which invested in real property.
After a two-year investigation, the regulator found that the company had on a number of occasions failed to have adequate professional indemnity (PI) insurance in place, failed to lodge audited financial reports on time, and did not hold membership of an ASIC-approved external dispute resolution (EDR) scheme in 2007 and for the period between 31 October 2011 and 7 March 2012.
In addition, ASIC was concerned Hickie failed to notify ASIC of significant breaches and that Lion Advantage did not have adequate compliance measures in place to ensure compliance with AFS requirements.
ASIC stated that the cancellation of Lion's AFS licence is subject to a specification that the licence continues in effect until 31 December 2012 as though the cancellation has not happened for the purpose of providing financial services necessary to transfer the schemes to a new responsible entity or for the winding up of the schemes.
"Licensees who fail to maintain adequate PI insurance expose retail clients to the risk that they go uncompensated in circumstances where a licensee has insufficient funds to meet client claims," ASIC commissioner Greg Tanzer said.
"EDR schemes are equally important as they provide consumers with alternatives to legal proceedings in respect of resolving complaints with their financial services providers," he said.
Lion Advantage and Hickie have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
