Super funds, investment managers and platforms servicing Dover-aligned financial advisers are scrambling to set policies for payments and authority in the wake of the licensee’s shock closure.
Last week InvestorDaily reported that Dover Financial Advisers will be unexpectedly wound up, leaving almost 400 authorised representatives urgently seeking transition to new AFSLs.
Dover advisers are unable to provide new advice after 8 June and must secure new licensing arrangements by 6 July, leaving their ability to receive payments transact on behalf of clients unclear and requiring product providers to develop a response strategy.
In the immediate aftermath of the Dover closure announcement, the Commonwealth Bank’s CommSec Adviser Services subsidiary has taken pre-emptive action on their Dover accounts.
In a communication to clients of Dover authorised representatives, seen by InvestorDaily, CAS announced that their adviser’s authority will be removed.
“Following the recent announcement regarding Dover Financial Advisers Pty Ltd (Dover) … ceasing to provide financial services, we will no longer accept instructions on your behalf from anyone employed or previously employed by Dover,” the communication states.
“Effective immediately: we will be removing your adviser's authority to transact and/or trade on your account/s; [and] instructions received such as transactions and/or trades, will only be actioned if they have been authorised by you (the account holder/s).”
Private emails seen by InvestorDaily suggest CBA subsidiary Colonial First State may take a similar approach, readying to suspend payments and commissions to Dover advisers, although a spokesperson for the bank was non-committal.
“We acknowledge this is a difficult time for advisers, and are working through what this situation means,” the spokesperson said.
“Like all providers, we need to consider both advisers and clients’ best interests.”
Some of those providers, however, have taken a different approach to the Dover transition period.
Netwealth joint managing director Matt Heine told ifa that his platform will “continue to pay adviser fees to the licensee for so long as the adviser and the licensee are licensed”.
“It currently appears that the licence of Dover will be cancelled on 6 July so it is Netwealth’s intention to pay fees that are due to that date,” Mr Heine said.
He explained that if the adviser moved to a new licensee after 6 July, or the client moved to a new adviser as ASIC has recommended, then a new authority from the client will be required.
Similarly, AustralianSuper has indicated that it will stand by Dover, which was one of its “accredited” licensees.
“AustralianSuper will honour 3rd party authorisations on behalf of your clients through to July 6th, with respect to the implementation of advice you have already provided on or before June 8th, 2018. You will be able to continue to access the Adviser Services Team until this date, unless you transfer to a new Licensee prior,” said an email from the industry fund to Dover advisers, obtained by InvestorDaily.
“If one of your AustralianSuper clients has an urgent need for advice prior to June 30, please contact the team. We may be able to arrange advice from one of our in-house or phone advisers to cover this period,” it continued.
If a Dover adviser moves to another accredited licensee, the fund may be able to continue to recognise the adviser as an “accredited AustralianSuper adviser”.
A BT spokesperson also indicated that Dover clients would continue to have access in the interim.
“Dover financial advisers with existing client arrangements continue to have access to BT’s platforms,” the spokesperson said.
“We are working to assist Dover advisers as they move to new licensing arrangements in the coming weeks and will comply with our obligations and continue to review as new information is provided by ASIC and The Dover Group.”
However, InvestorDaily understands that some Dover advisers were restricted to ‘read only’ access of BT platforms in the immediate aftermath of the closure announcement, with full access subsequently reinstated.
A number of Dover advisers, speaking on condition of anonymity, alleged that they have been informed that commissions will be suspended for some MLC platforms such as Navigator and Masterkey.
An MLC spokesperson denied the charge, explaining that it is “business as usual”.
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