The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence (AFSL) of former national financial advisory business Libertas Financial Planning Pty Ltd (in liquidation).

This is the first time ASIC has cancelled an AFSL following a payment of compensation by the Compensation Scheme of Last Resort (CSLR).

The CSLR was established in June 2023, commencing operations in April 2024. It can pay up to $150,000 in compensation to consumers who have an unpaid determination from the Australian Financial Complaints Authority (AFCA) relating to authorised personal financial advice, credit intermediation, securities dealing or credit provision, and where other eligibility criteria are met.

The AFCA complaint process must first be completed before a claim can be lodged with the CSLR. All reasonable steps to obtain compensation from the financial firm must be taken before a CSLR payment can be made.

Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the Australian financial services licence of the firm.

The cancellation is not subject to discretion or merits review.

On 24 July 2023, AFCA made a determination against Libertas, which Libertas failed to pay. On 24 July 2024, the CSLR paid an amount of compensation to a person for the AFCA determination and notified ASIC. On 14 August 2024, ASIC cancelled the Australian financial services licence of Libertas.