One of Australia’s largest non-bank dealer group networks will cease to exist as Dover Financial Advisers claims it has felt the full force of the corporate regulator in the wake of the royal commission.
In an email sent to the company’s authorised representatives on Friday, seen by InvestorDaily, Dover director Terry McMaster advises that Dover’s AFSL will be cancelled following what he says is intervention from ASIC.
The shock announcement will result in Dover’s nearly-400 financial advisers being unable to provide advice and urgently seeking new licensing arrangements.
“Following an agreement reached with ASIC earlier this week, I am writing to inform you that Dover Financial Advisers Pty Ltd will cease to operate as an AFSL,” the email said.
“We have been negotiating with ASIC about the most orderly way for this to happen.”
The letter indicates that the authority of all Dover advisers will be withdrawn and no new advice will be able to be provided from today.
“Dover’s authorised representatives may implement advice in the period to 6 July 2018 provided the instructions were received from their clients on or before 8 June 2018,” the letter confirms.
“We very much apologise for the short notice,” it continues. “The above was only agreed in the last 72 hours.”
It also apologised for the "impersonal" medium in which the announcement was made, explaining that contacting advisers individually was not feasible, before re-emphasising the terms of the ASIC agreement.
“It is very important that you understand that, from today forward, you cannot provide any new advice or service to clients. There are no exceptions to this.
“Any such advice or service will be in direct contradiction of ASIC’s requirements.
“As you can imagine, ASIC is watching the way that we wind the AFSL down very closely.”
The letter also confirms that Dover’s staff will be “discontinuing their employment with us in the near future” and makes clear that advisers will need to pay all dues owed to Dover in order to receive co-operation in transitioning to new AFSLs or received commission and platform payments.
It does not offer any substantive reasons for the closure and says that Dover will not be able to provide advisers with “any further information about [the] negotiations with ASIC”.
However, its author, Mr McMaster, indicates that the decision may be causally related to the evidence he provided to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“As you know, our business has been under substantial public scrutiny in recent months,” he said.
“If the last six weeks have shown us anything, it is that it is easy for statements to be interpreted in ways other than how we expect.”
The letter concludes that the mission to provide a “direct, unconflicted model” for financial advice became “impossible”.
Mr McMaster was hospitalised after collapsing during tense cross-examination by counsel assisting the royal commission Mark Costello QC.
During proceedings, Mr Costello described elements of Dover’s business model as “Orwellian”.
InvestorDaily has sought clarification from ASIC and is awaiting a response.
Mr McMaster declined a request for interview.
The government has released exposure draft legislation for the Consumer Data Right, which will give users the ability to grant third party p...
Friday’s “blow-torch” royal commission hearings could result in vertically integrated firms like IOOF being dismantled by the regulat...
Leaders in the Australian banking sector would advise the government to create a fairer playing field for both smaller and bigger banking en...