In a statement, ASIC said it had suspended the licence of Perth-based advice firm Ballast Financial Management until 18 December.
The regulator said the licence was suspended because Ballast ceased carrying on a financial services business when it was unable to obtain professional indemnity insurance to comply with its obligation to have adequate compensation arrangements in place.
“Under s912B of the Corporations Act 2001, AFS licensees must have arrangements for compensating retail clients for losses they suffer as a result of the licensee or its representatives breaching their obligations in Chapter 7,” ASIC said.
ASIC said the 10-week suspension would give the firm time to put in place adequate compensation arrangements, as well as appoint a new responsible manager after the resignation of the previous person in the role.
“If Ballast is unable to demonstrate that it is in a position to recommence its financial services business by the end of the 10-week suspension, ASIC will consider cancelling its licence,” the regulator said.
ASIC said Ballast had held its licence since October 2003.
There’s only two companies offering PI insurance in Australia and the fact we’ve gotten to that stage is disgraceful.
What happens to the advisers in the meantime?
Business as usual.
In what way does that help, suspension will stop any income flow into the afsl to cover associated costs and income for advisers, asic is creating more of a problem.. suspending someone’s licence is not a solution this will effect people putting food on the table both
Clients and staff
Ballast appears to be an AR not an AFSL , is the AFSL AD?