Australia's Freedom Insurance Group (FIG) has decided to close down the business carried on by its 100% owned subsidiary, Spectrum Wealth Advisers with immediate effect. FIG comprises the Freedom Insurance and Spectrum Wealth Management brands.

According to an Australian Securities Exchange statement, Spectrum is unable to continue to meet a condition of its Australian Financial Services Licence which has a ‘key person’ requirement. Spectrum is unable to continue to comply with this licence requirement after a significant number of personnel who were performing duties on behalf of the company in its financial services business departed.

Just last month, FIG executed a transition agreement to transfer its policy administration business to Swiss Re Life & Health Australia for a net settlement consideration of A$5m ($3.5m). Embattled FIG ran into millions in losses and plunging share prices after being heavily scrutinised by the regulator during the Hayne royal commission.

Spectrum has notified the Australian Securities and Investments Commission of its most recent divestment.  Accordingly, it is also issuing notices to its authorised representatives terminating their agreements and advising that no further business should be carried on under the agreements. 

Spectrum will support the orderly transition of all of its authorised representatives and the related clients, to alternative Australian financial services licensees where requested. The financial impact of the closure of the Spectrum business will be advised when Freedom release its accounts.