Advice firm and principal obliged to cancel AFSL

Mike Taylor

Managing Editor/Publisher, Financial Newswire

14 November 2022

The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from financial advice firm, Lasarith Pty Ltd trading as Succession Matters resulting in the company ceasing operations and ultimately cancelling its license.

ASIC announced that both Lasarith and its sole director and responsible manager, Adam Smith, had undertaken to case operating under the AFSL and start the process to cancel the AFSL by 8 February, next year.

It said Smith had also undertaken to conduct further professional training and not be a responsible manager for any other AFSL holder for a period of at least 18 months from 10 November, 2022.

ASIC commenced an investigation into Lasarith and Mr Smith after becoming concerned that Lasarith and its authorised representatives had failed to provide statements of advice to clients as required by the Corporations Act. ASIC’s investigation subsequently identified:

• at least 24 occasions during the 2016/17 and 2017/18 financial years when Lasarith and its authorised representatives failed to provide a statement of advice to clients in accordance with s946A of the Corporations Act; and
• at least 30 occasions during the 2016/17 and 2017/18 financial years when Lasarith and its authorised representatives failed to provide a statement of advice to clients within the period specified in s946C of the Corporations Act.

Despite Mr Smith knowing about the failure to provide statements of advice since at least 7 March 2017, ASIC’s investigation found he:

• failed to take sufficient action to prevent breaches of the Corporations Act from occurring, until September 2017; and
• failed to cause Lasarith to notify ASIC of the breaches until September 2021; and
• did not fulfil all of his obligations as the responsible manager of Lasarith during the 2016/17 and 2017/18 financial years.