The revocation was carried out under the Compensation Scheme of Last Resort (CSLR) regulation, which was implemented in April.
The CSLR made a compensation payment to the affected client on 24 July 2024.
The Australian Securities and Investments Commission (ASIC) has officially revoked the financial services license of Libertas Financial Planning Pty Ltd. This marks the first instance of ASIC exercising its authority under the newly enacted Compensation Scheme of Last Resort (CSLR) to compensate a client.
Ensuring Consumer Protection
The CSLR, which began operations in April 2024, is designed to safeguard consumers who have incurred financial losses due to the misconduct of licensed firms and are unable to recover compensation through other means.
The scheme allows for compensation payments of up to $150,000 to eligible consumers who have received an unpaid determination from the Australian Financial Complaints Authority (AFCA) in cases involving financial advice, securities transactions, and credit services.
ASIC’s action was prompted by AFCA’s ruling against Libertas Financial Planning on 24 July 2023, which the firm failed to satisfy. As a result, the CSLR intervened and made a compensation payment to the affected client on 24 July 2024. Following this, ASIC revoked Libertas Financial Planning’s Australian Financial Services License (AFSL) on 14 August 2024, after being notified by the CSLR.
Recent Regulatory Actions
Last month, ASIC took similar enforcement action against United Global Capital (UGC) and its Director. Joel James Hewish was banned from the financial services industry for ten years, and UGC’s financial services license was canceled.
ASIC’s investigation revealed that UGC’s authorized representatives were involved in questionable practices, including advising clients to establish self-managed superannuation funds and invest in speculative products associated with Hewish.
Additionally, ASIC recently introduced new guidelines for both unlicensed entities and AFS licensees regarding unsolicited contact leading to financial advice. The regulation emphasizes the legal obligations and compliance requirements for entities engaging in unsolicited and digital interactions with consumers, stressing the importance of adhering to financial services laws.
Entities that facilitate financial transactions, influence consumer decisions, or engage in digital communications related to financial advice must possess an AFS license or the necessary authorization.
