More Nonsense from ASIC
ASIC made this media release today:
ASIC has cancelled the Australian financial services (AFS) licence of Queensland-based Advamode Financial Pty Ltd (Advamode). The cancellation was made at Advamode’s request after the company was placed into liquidation on 4 May 2016.
The licence cancellation and liquidation follow previous ASIC action against Advamode that led to licence conditions being imposed on the financial services firm on 2 September 2015 (refer: 15-242MR).Clients of Advamode can still lodge a complaint about any advice received from representatives of Advamode.
Advamode’s licence remains in effect for the purposes of External Dispute Resolution Scheme membership and client compensation purposes. Clients with concerns are encouraged to lodge any complaints as soon as possible.
The AFS licence cancellation took effect on 20 June 2016.
The following issues arise:
- when the company was placed into liquidation its PI insurance would have been automatically cancelled – PI insurance policies are claims made – the Insurer will only respond to claims that are made whilst the policy was in force – clients can make all of the claims that they they want but they will never be paid out because their claims will have been made after the company was placed into liquidation; and
- the reference to clients making claims is disturbing – the implication being that ASIC is aware of circumstances that indicate that clients should be making claims for compensation – once again the regulatory system has failed consumers.