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
Shaw and Partners’ new national head of private wealth believes the biggest challenge for financial advisers right now is being able to deliver efficient advice delivery amid a complex regulatory environment and growing investment universe.
Global equity manager Orbis Investments has appointed a head of marketing from Capital Group as it becomes the latest manager to target advised retail investors.
While Australia prepares for the $3.5 trillion intergenerational wealth transfer, two female advisers have discussed why women may be detracted from seeking advice and the impact of the gender imbalance in the industry.
ETF provider Betashares has launched a global bond ETF as investors pour billions into cash and fixed income ETFs.
