A number of financial planners working as authorised representatives (ARs) under the Morrison Carr licence claim the Australian Securities and Investments Commission (ASIC) failed to appropriately notify them when the dealer group's licence had been cancelled, leaving them practising in an illegal capacity.
The planners said they did not have an issue with ASIC's decision to cancel Morrison Carr's licence but, rather, the regulator's failure to appropriately inform them the moment they were no longer licensed.
One of the affected planners, now working as an AR for another dealer group, said he received no formal documentation from ASIC relating to his status until 10 August – 11 days after ASIC issued a media release announcing the cancellation of Morrison Carr's Australian financial services licence and its Australian credit licence.
Further, he said a check of the ASIC register via the regulator's website suggested that he had been delivering advice in an unlicensed capacity for a number of days before ASIC issued its media release on 30 July.
The adviser said the ASIC letter received on 10 August had been dated 3 August.
"The most concerning part is that my Authorised Representative status and that of other Morrison Carr planners was cancelled well before any of us received any formal notification of what was going on," he said.
"Given that we were continuing to provide advice during that period, we had the potential to find ourselves in a very serious situation, particularly with respect to being able to access professional indemnity cover," the planner said.
He said that the dilemma which confronted the Morrison Carr ARs had not been assisted by the fact that correspondence received from the dealer group had suggested that the matter was in the hands of its lawyers and capable of being resolved.
For its part, while ASIC's initial media release announced the cancellation of Morrison Carr's licences, it was vague about the reasons why and made clear that the dealer group had filed an application for review and a stay in the Administrative Appeals Tribunal (AAT).
It was only after the AAT appeal process had failed that ASIC (on 2 August) revealed the reasons for its decision to cancel Morrison Carr's licence and that of its principal, Dennis Cardakaris.
That statement said ASIC was concerned Cardakaris was not of good fame and character, given evidence he provided false information to the company's insurer and took steps to avoid client claims.
In a statement to Money Management, ASIC said it "developed a comprehensive communication strategy for the representatives which included phone calls and emails where possible and a written letter".
This action was "in addition to the entry made on the public register and the media release, which were made as soon as practicable after the decision was served on Mr Cardakaris," ASIC stated.
ASIC said it was mindful of the potential impact this action would have on authorised representatives and credit representatives of Morrison Carr, and that its contact with past representatives of Morrison Carr is ongoing.
