The Australian Securities and Investment Commission has cancelled the Australian financial services licence of financial planner Lion Advantage, and banned its chief executive from providing financial services for two years.

Lion Advantage provided financial product services to retail clients and operated four registered managed investment schemes which invested in real property.

ASIC discovered that Lion Advantage had breached a number of the financial, reporting and other obligations of a financial services licensee and that David Hickie had not complied with financial services laws.

The firm failed to have adequate professional indemnity insurance in placelodge audited financial reports on time for Lion Advantage and the schemes it operated. It also did not hold membership of an ASIC-approved external dispute resolution scheme in 2007 and for the period between 31 October 2011 and 7 March 2012.

"Companies have important obligations that are central to ensuring the transparency and accountability of the reporting process and must comply with their reporting requirements to ensure users of financial reports like shareholders and creditors have the information available to them to help them make informed decisions," commissioner Greg Tanzer said.

"Licensees who fail to maintain adequate PI insurance expose retail clients to the risk that they go uncompensated in circumstances where a licensee has insufficient funds to meet client claims. EDR schemes are equally important as they provide consumers with alternatives to legal proceedings in respect of resolving complaints with their financial service providers," he added.

ASIC was also concerned that Lion Advantage and Mr Hickie:
failed to comply with the obligation to notify ASIC of significant breaches, and
did not have adequate compliance measures in place to ensure compliance with financial services laws.

Lion Advantage and Hickie have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

The cancellation of Lion’s AFS license is effective 10 August 2012, Hickie’s banning is effective from 14 August 2012.