June 12, 2018
ASIC has confirmed that it was investigating Dover Financial Advisers but the sudden closure of the group, announced late last week, was initiated by the group and its owner, Terry McMaster.
In a statement released to the media, the regulator remarked that as part of an ongoing investigation which began in 2017 “…ASIC served a notice of hearing on Dover that ASIC was minded to suspend or cancel Dover’s AFSL”.
“The matter has not gone to hearing but as a result of this notice, Dover and Mr McMaster have advised that, amongst other things, Dover will cease providing financial services,” ASIC stated.
The regulator added that it did not intend to comment further at this stage but the investigation initiated last year was continuing.
In a note sent to Dover advisers on Friday informing them of the closure of the business (see: Dover Financial Advisers to Close in One Month), McMaster said the shutdown followed an agreement reached with ASIC earlier in the week around when the business would close and what advisers would be able to do beforehand.
“Dover and Mr McMaster have advised that…Dover will cease providing financial services”
He said these matters had only been agreed in the 72 hours before the note was sent out and “Various aspects of the agreement, including the time of year and the speed of the closure, were entirely outside of our control”.
Dover had recently come under scrutiny from ASIC for its Dover Client Protection Policy and was required to post an ASIC notice on its website, for a period of 60 days from mid-April, that the policy contained provisions which were unlawful and void.
The Policy was also raised at the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry hearings into financial advice where it was alleged the documents were an attempt to exclude Dover’s liability for the acts of its authorised representatives.
At the hearing, McMaster rejected the idea the group had intentionally set out to exclude Dover from any potential liabilities but added calling the document a ‘Protection Policy’ was a ‘misnomer’.
In a written submission to the Royal Commission following the conclusion of the hearings, Dover stated it did not recognise the Policy was ‘inappropriate’ until notified by ASIC and, under law, Dover was able to seek to limit any liabilities it may face.
“There is nothing improper in Dover looking to protect its interests by seeking to limit or exclude liability to the extent permitted by law. It is commonplace, and unobjectionable, for businesses and professionals providing advice for reward to do so,” the submission noted.
“However Dover accepts that the manner in which it sought to exclude or limit liability through the DCPP was inappropriate.”