Newcastle advice firm sees AFSL suspended over key person omission
ASIC has temporarily suspended the AFSL of Newcastle-based advice firm Focused Financial Advice after discovering it had provided financial services for two years without a key person.
ASIC found that when the key person and responsible manager on the AFSL ceased, FFA failed to apply to ASIC to vary its AFSL within five days as required by its AFSL conditions.
The change had been enacted in 2023 following the sale of shares in FFA and the key person and responsible manager also ceased at the time which meant the firm ended up providing financial services for two years without a key person.
By continuing to provide financial services after the cessation of the key person, ASIC said FFA failed to comply with the obligation to maintain the competence to provide the financial services under the licence.
ASIC also found that FFA was unaware of the breach until ASIC made enquiries of the licensee, having conducted a review of advice licensees which use lead generation services.
As a result, its AFSL has been suspended until 19 December 2025 in order for FFA to meet the conditions and for them to be approved by ASIC which ASIC described as an “important regulatory safeguard”.
Key person conditions are imposed on an AFSL where ASIC considers a licensee is heavily dependent on the competence of one or two responsible managers in the provision of the financial services.
ASIC’s action also reinforces its ongoing focus on ensuring compliance by AFSLs with their licence conditions, including when a licensee has a change in ownership control.
AUTHOR
Laura Dew
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