While the group had previously expressed its intention to exit the business, it has now been forced to do so after Spectrum failed to meet its licence conditions.
“Spectrum’s Australian Financial Services Licence (AFSL) has a ‘key person’ requirement and due to the departure of a number of personnel who were performing duties on behalf of the company with respect to its financial services business, Spectrum is unable to continue to comply with this licence requirement,” Freedom said.
The insurance group has also notified the Australian Securities and Investments Commission (ASIC) about its decision.
However, the regulator had not commented on the matter at the time of publication.
As a result, Spectrum is now issuing notices to its authorised representatives to communicate the termination of their agreements, and to advise that no further business should be carried out under such agreements as well.
Additionally, the wealth advisory firm will be in charge of migrating all of its clients and authorised representatives to other AFSL organisations when required.
“The financial impact of the closure of the Spectrum business will be advised when Freedom releases their accounts,” the group added.