ASIC has suspended the Australian financial services (AFS) licence of Perth-based financial advice provider Ballast Financial Management Pty Ltd (Ballast) until 18 December 2020.

The licence was suspended because Ballast had ceased to carry on a financial services business. Under s915B of the Corporations Act 2001, ASIC may suspend or cancel an AFS licence without offering a hearing if the licensee ceases to carry on the financial services business.

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.

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.

The 10-week suspension will give Ballast sufficient time to put in place adequate compensation arrangements. The suspension also provides Ballast an opportunity to identify and appoint an appropriately qualified and experienced responsible manager following the resignation of its previous responsible manager.

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.

Background

Ballast Financial Management Pty Ltd has held AFS licence no. 233180 since 1 October 2003.

Editor's note:
Ballast Financial Management Pty Ltd’s AFS licence suspension ceased on 19 December 2020, after Ballast obtained professional indemnity insurance, nominated a new responsible manager and indicated its intention to recommence its financial services business.