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ASIC explains why it permanently banned Morrison Carr's sole director from the industry. Morrison Carr Financial Services director Dennis Cardakaris was permanently banned from providing financial services because he gave false information in relation to an application for professional indemnity insurance, ASIC said.

He also tried to avoid claims from clients by arranging the transfer of the business to a new Australian financial service licence (AFSL), the regulator said yesterday in a further explanation of the action against Cardakaris.

Morrison Carr Financial Services also did not have adequate compensation arrangements in place, the regulator said.

ASIC said it was concerned the financial services firm and Cardakaris did not conduct their business in a fair, honest or professional manner.

"Licensees must take responsibility for the accuracy and completeness of the information they provide to their insurers, clients and ASIC," ASIC commissioner Peter Kell said.

"Mr Cardakaris was someone with a lot of experience in the financial services industry who should have known his responsibilities.

"Ultimately, licensees may choose to seek assistance from external consultants but they cannot outsource responsibility for the information provided."

FPA chief executive Mark Rantall acknowledged that professional indemnity insurance premiums had risen steeply in recent years, putting strain on financial planners.

But he said the best way to lower premiums was to adhere to the association's code of conduct and avoid claims against the policy.

"Professional indemnity premiums are directly linked to the claims made against the policies, so one way to ensure that we have lower premiums is to ensure we have lower claims," Rantall told InvestorDaily.

"The FPA has a code of professional conduct which is used as a benchmark for assessing claims, whether through the financial ombudsman or through the courts, so we encourage planners to follow the guidelines in the code to avoid litigation."

Rantall said neither Cardakaris or his firm were members of the FPA.##

ASIC withdrew the firms AFSL and enforced the permanent ban on 25 July.

It also banned Cardakaris from providing credit activities.

The regulator said it had reason to believe that Cardakaris would not comply with financial services laws and that he is likely to contravene credit legislation.#

Cardakaris can still seek a review in the Administrative Appeals Tribunal of ASIC's decision.