Non-aligned financial advice group Dover Financial Advisers has told its advisers their authority to act as authorized representatives had been withdrawn immediately and the group would cancel its licence in one month.
In a note sent to around 400 advisers working under the group’s licence, Dover Financial Advisers principal and owner, Terry McMaster apologized to the advisers for the short notice and said the decision to close the business was the result of an agreement reached with ASIC in the past 72 hours.
He said under the agreement Dover would withdraw the authority of its authorised representatives to provide financial advice by 8 June 2018, and terminate the appointment of its authorised representatives and cancel its AFSL by 6 July 2018.
He stressed that no new advice could be provided after 8 June and only advice for which written instructions had been received from clients prior to that date could be acted upon before 6 July.
“Unfortunately, there can be no exceptions here. Our agreement with ASIC is that no new advice or services occur after today (8 June 2018),” Mc Master said.
He added that any adviser who wrote new business would be in direct contradiction of ASIC’s requirements and would also breach their contract with Dover and may be liable for any damages that could arise from the advice.
“We will not be able to provide you with any further information about our negotiations with ASIC or our closure generally”
McMaster said Dover would assist advisers to transition to new licensing arrangements but could not provide specific help on which licencee they should join, adding “All we can say is that we are aware of several AFSLs who have been actively canvassing our advisers in recent weeks, and that we are assured by consultants that several AFSLs are recruiting”.
No specific reasons for the shutdown were provided by McMaster who claimed the group had been under scrutiny for the past few months, and this would continue during the shutdown.
“We will not be able to provide you with any further information about our negotiations with ASIC or our closure generally. Other than the contents of this email, there is nothing that our staff will be able to tell you,” McMaster said.
“Please avoid any reckless responses to this notice. At times such as this there may be a temptation for you to act outside of the terms of our agreement or to act in ways that do not benefit your clients. Our closure is being closely monitored by ASIC and ASIC will be particularly aware of all conduct on the part of advisers at this time,” he added
McMaster appeared at the recent financial advice hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry where he was questioned about the Dover Client Protection Policy, which was part of Dover’s Financial Services Guides and its Statements of Advice.
At the hearing in late April, Counsel Assisting the Commission, Mark Costello labelled the Protection Policy as “…nothing more than an elaborate attempt to exclude Dover’s liability for the acts of its authorised representatives”.
An ASIC Notice addressed to Dover clients from 13 April 2018, available on the group’s website, addressed concerns around the use of the Policy and stated, “On 22 March 2018 Dover was notified by ASIC that it had reviewed the Dover Client Protection Policy and believed it contained certain provisions which were unlawful and void”.
The notice continued, “The Protection Policy was deceptive because it contained certain provisions the effect of which were to avoid liability to compensate clients for any loss resulting from the advice provided” adding that Dover would not rely on those clauses in a dispute as they were “…unlawful and are voided by the financial services law and the general law”.
Dover stated it had immediately withdrawn the Protection Policy, replaced it with a new retrospective information policy and had written to each client potentially affected by the provisions of the Protection Policy.
According to ASIC records, Dover had 393 advisers as at 1 June 2018.
I wonder whether this is the start of a more proactive regulator where they will have no hesitation to shutdown Licencees including those who are self licensed. ASIC are currently giving the big six (big 4 banks, Macquarie and AMP) a pretty tough time.
Really? Funny how they didn’t pull the CBA’s licence and just slapped them with s big fine. Too big to fail?
If Dover’s licence got revoked then so should have AMPs and CBAs
hmmmm,,,We might eventually discover that it is not so much a revocation as maybe Mr McMaster saying that If authorities insist that the interpretation of the law is to leave Dover ( and ultimately the client) totally exposed with no protection and no insurance against liability from illegal activities by an adviser acting totally against their contracted agreement re compliance checking processes etc then he is out of there thanks very much. . Maybe not, but it would not surprise me. It could well be a move to bring an elephant in the room into clear view. Meanwhile ….. we wait.
Hmmm, worst kept secret in the industry finally sees the light of day beyond the Royal Commission’s investigative eyes. Thanks Dover, until your questionable activities came to light we ARs [belonging to other non-aligned Licensees] were rightly critical of the vertically integrated Licensees’ very questionable activities. Now, yet again, we [the majority of ethical advisers] will be brought into question by the dubious activities of a minority trying to skirt their responsibilities.
I think most the industry knew about Dover. Despite this imagine the effect on clients of such short notice especially in the lead up to 30 June. Is this really in clients best interest to shut the licence down so quickly – seems to me its abandoning clients – why could this not have been done in an orderly manner say over 3 months so clients could continue to be serviced until new licence found by A/R (the good ones that other licences will pick up). By the way “Face The Facts” – Dover is not vertically integrated – you are confusing yourself with the big 5. “Megs” I think you are the only one that gets it.
When Dover sent our recruitment letters, it stated that every SOA was vetted by experienced solicitors.
Considering that ASIC is run by and full of solicitors, it appears, as is always the case when lawyers draw up contracts, that when there is an issue, no one, not even the legal eagles can agree on what the agreements and contracts, actually meant.
The reason why the world is confused is because of the continuous use of contracts, agreements and regulations that are way too complex and are so long and arduous to even read, let alone comprehend, that the world just shrugs their shoulders, signs or ticks the boxes to agree that they understand, so they can just get on with running their Business.
What hope does any business have, when everyone is forced to sign and agree to an impenetrable maze of red tape, regulation and contracts people find too complex, including lawyers, who clearly do not understand the problems these bits of paper cause when things go pear shaped.
So…is what they did worse than the banks, if not…why have those oligarch scammers still got licences …this is not a level playing field and ASIC KNOW THIS AND ARE RESPONSIBLE FOR BIASED ACTION
Comments are closed.