The Australian Securities and Investments Commission has canceled Libertas Financial Planning Pty Ltd’s license. According to the regulator’s announcement today (Monday), the cancellation of the Australian financial services license marks the first time the regulator has taken such action under the newly
operational Compensation Scheme of Last Resort (CSLR) in a compensation
payout to a client.
Consumer Protection
The CSLR, which commenced operations in April 2024,
was created to protect consumers who have suffered financial losses due to the
misconduct of licensed firms but have been unable to recover compensation.
The scheme can reportedly pay up to $150,000 to
eligible consumers who have an unpaid determination from the Australian
Financial Complaints Authority (AFCA) relating to issues such as financial
advice, securities dealing, and credit intermediation.
The regulator mentioned that it took this action as a result of AFCA’s determination against Libertas Financial Planning on 24 July 2023,
which the firm failed to satisfy.
We have cancelled the Australian financial services licence of former financial advice business Libertas Financial, the first such cancellation following a payment of compensation by the Compensation Scheme of Last Resort https://t.co/jMMgjEGr6u
— ASIC Media (@asicmedia) August 19, 2024
Subsequently, the CSLR stepped in and made a
compensation payment to the affected client on 24 July 2024. ASIC, in response,
canceled the AFSL of Libertas Financial Planning on 14 August 2024, following
notification from the CSLR.
Compensation Payment
Last month, ASIC took action against United Global Capital (UGC) and its Director. The regulator banned Joel James Hewish from the financial services industry for ten years and canceled UGC’s financial services license.
ASIC reportedly found that UGC’s authorized representatives engaged in questionable practices, including recommending that clients create self-managed superannuation funds and invest in speculative products related to Hewish.
In addition, ASIC recently issued a new guideline for unlicensed entities and AFS licensees. The regulation relates to unsolicited contact
leading to financial advice. The regulation highlighted the legal responsibilities
and compliance obligations for entities engaging in unsolicited and digital contact with consumers and underscored the need to follow financial services
laws.
According to the regulator, entities facilitating
financial transactions, influencing consumer decisions, or engaging in digital
interactions related to financial advice require an AFS license or appropriate
authorization.
This article was written by Jared Kirui at www.financemagnates.com.
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