In June 2018, ASIC said it intended to cancel Dover’s licence due to compliance issues but didn’t reveal any further details.
However, an ASIC Financial Services Enforcement (FSE) team document shows that the corporate regulator had been wanting to take action against Dover and its director, Terry McMaster, since 2016.
In the document, ASIC justified the action by saying “Dover’s arrangements for the monitoring and supervision of representatives are inadequate”.
Further, it said that when adviser misconduct is identified by Dover, it “fails to take appropriate steps to remediate the client in relation to the advice they have been provided”.
“Following engagements with FSE we would seek to consider action against McMaster under s1101B, specifically pursuing an order that McMaster is prohibited from providing financial services and prohibited from being involved in the provision of financial services so that he can no longer operate Dover,” the document read.
“Due to the level of operational control exercised by McMaster in relation to Dover, there is no possibility of any change within the compliance framework of Dover without his removal.
“Depending on the time frames, this may also require injunctive action against McMaster under s1324.”
But emails seen by ifa reveal that Dover reported banned adviser Joshua Fuoco to ASIC on two occasions – once in 2013 and again in 2015.
Dover’s whistleblowing in 2015 led to ASIC ordering Wealth Risk Management, a firm of which Mr Fuoco was a director, to pay $7.8 million in penalties.
ASIC said the penalty related to conduct that resulted in “substantial erosion of the client’s superannuation balances”.
Speaking to ifa, Mr McMaster said ASIC then used the information to allege that he was running a premature release of super scheme and running SMSF property scams like the ones that were run by Mr Fuoco.
In addition, Mr McMaster said he continually asked for meetings with ASIC, but ASIC refused to meet or in any way discuss its concerns.
“If ASIC [had agreed] to a meeting with a non-bank AFSL, these issues could have [been] sorted out. I was also undertaking to adopt any changes ASIC required. Again, no response,” he said.
“ASIC only had to ring. But it never did. You should see what happened when a bank AFSL rang ASIC. It’s chalk and cheese. The ASIC senior executive team scrambled to be there. They could not meet fast enough.”
Earlier this week, court documents showed that ASIC conceded that it had no evidence to date that any client was deceived or misled by Dover Financial’s Client Protection Policy.
More to come.
McMaster has been 100% scapegoated and duded. He is good operator. In the future his name will used in reference to martyrdom. I’m serious.
Why has no one ever questioned the politicians as to why Advisers and the industry are regulated by people with absolutely no financial services experience, who have no idea what’s involved, nor what clients want? It would be similar to placing McDonalds shift managers into the positions of Tax Commissioners at the ATO. Our clients are making complaints – but it’s that they don’t want lengthy SoAs or RoAs or even FDSes or Opt-ins. They want simplification. They want the choice of how they pay for a service. They want us to be able to get on with the job they’ve hired us to do, not spend all our time on paperwork they have no interest in.
Exactly, this is the reason the royal commission and all other recent ‘reforms’ have missed the mark completely.
So true. It’s gotten out of hand. We now can’t really do the job as proficiently and proactively as we should. Too weighed down with compliance and paperwork even for the simplest of tasks.
Interesting that the issue of SMSF property scams has been raised.
Terry was a big promoter of the accountant’s approach to financial planning…residential property, “blue chip” Australian shares, and inhouse SMSFs. Other products and asset classes were discouraged.
If ASIC has identified this approach as a problem, then great, so they should. But there are thousands of accountants giving exactly the same inappropriate advice. And when accountants do it it’s not just inappropriate, in most cases it’s also illegal because they are doing so without an AFSL.
I spent the last few years of my advising time with Dover until 2013. Yes Terry liked that SMSF model but it was generally thought suitable for his Doctor clients and was very conservatively framed with cautions everywhere , especially about borrowing unless high income and masses of spare liquidity etc. He never “discouraged” me from using the low cost wholesale managed funds and ethical investment funds that suited my client base. I eventually set up my own SMSF as I wished to invest in a small commercial property for my business to rent and the guidance from McMasters ( even after I had “left”) was first class.
As a client now I get my SMSF accounting returns done by them for under $1500 ( from my good notes and organised data) which includes very good guidance and reminders of what is required. I have in one case before I retired rescued a client ( my best friend’s sister) from an ( unlicensed) accountant charging her $9000 a year to do the SMSF accounts when the $450,000 portfolio was one managed fund platform also charging full fees, and one v small parcel of listed shares… meanwhile emailing her to sell the managed fund and see their mate the real estate agent down in Dunsborough about some blocks he is selling. I only saved her $14,000 a year. And that is not the only one. The RC has been barking up the wrong tree , with certain power people pointing a the wrong cat.
I think it’s important to ask Tim Mackay (after his asked Claire) what his thoughts are? He can then tell the 20k financial planners in Australia to think and why, and that it’s the only way to do things with total disregard to anyone else or any other business models whilst everyone is suffering financially and mental-health wise with LIF, FASEA, RC…
I think he is too busy arguing for getting rid of imputation credits, insurance commissions and recinding grandfathered arrangements immediately. Nothing better than an “independent” financial adviser who went to a product provider subsidised FPA Congress. Soft Dollar Benefit anyone?
Oh what heresy..surely not sponsored???
This is now sounding very much like a pre-meditated action and subsequent kill.
There are many, many more questions and investigations that must be completed in relation to this matter and if ASIC were to be proven negligent in their actions, fair compensation to Dover and their effected advisers should be forthcoming.
This is not an issue that will go away and determination and resolve will be required to tough this out.
I have no doubt that ASIC will fight and justify with everything they have because if proven negligent and incompetent, it will set a very important precedent.
It would be frightening to be in ASIC head office on a Friday afternoon when they have confirmation of yet another scalp………it would be jubiliation ,back slapping and beers all round.
this isn’t just about Dover anymore. what about the wide sweeping public condemnation that followed of all advisers. what about the subsequent effect on the goodwill of my practice. what about the mental trauma I had to endure through the daily condescension.
we have all been affected by ASIC’s treatment of Dover, and in particular in the way they carried it out.
there needs to be a class action. full stop. and that needs to be joined by every adviser in australia
An excellent idea. We just need somebody to marshall the troops. Can’t imagine that any of the 20,000 advisers would not sign up. There is only so much you can take from the school yard bully
It seems ASIC should be charged with providing an AFSL to a (clearly) unworthy party and causing this sh one t storm. But who would prosecute the ASIC executives??
Where is Adele Ferguson and all of her journalistic experience in exposing what seems to be corrupt or inept at least, behaviour from ASIC in regards to Dover and the clear biased approach to small/er advice business’. If she is looking for another Walkley Award or any other journo for that matter – here is one sitting up ready to be accepted by any courageous journo ready to dig!
she is not interested. she is in the camp that wants to persecute advisers. i wonder what they will say after the fasea reforms, after the grandfather comms are gone and so with it most advisers.
they will need to find another topic soon. they have until 31 December 2023
Her paper gets their revenue from bank and industry fund advertising. Dover was competition. No hope of her reporting or mainstream media. Too much to lose in advertising accounts.
No chance of a cushy well paid job for ex ASIC lawyers at Dover so they shut them down. Plenty of well paid jobs at the big banks so ASIC fall over themselves to help them out.
Rubbish. The Dover Head Office prepared/reviewed every SOA – with legal professionals involved . How then were monitoring and supervision “inadequate”? The AFSL checked all the advice before it was given! This arrangement was more rigorous than every other AFSL in the Industry. I have never met McMaster and don’t know that much about the business but this is really starting to look and sound like a conspiracy.
I joined Dover from my 25 years of small time advising always under License of ( 3) colleagues who were all from Accounting origins and moved to full time advice. We worked as colleagues.. When the last one wanted to semi retire and only look after his own clients I found Dover. Everything I had longed for to lead a good quiet and honorable life was there. Terry is the real deal. I had to retire duet to cancer ( oo fixed now but I am 73) . Deadly serious about everything being right. Your suspicions are I believe more than soundly based. This story is only juts getting started.
Spot on.
It is unbelievable how so many faceless (and gutless) individuals are willing to pass judgement on Dover. Read this….EVERY SOA that went out was checked multiple times by compliance before going out to clients including by qualified legal practitioners. What other dealer group does that? There is no doubt whatsoever that Dover was more compliant than most dealer groups.
And if you are willing to shoot your mouth off why don’t you invite ASIC in to audit your own files and prove how good you are.
ASIC could shut down any advice practice in Australia.
At some point somebody has to take on these bureaucrats
If Dover was checking every single SOA prior to approved advice being given…. why would Dover have had to report the actions of Fuoco? Something here doesn’t add up.
Fuoco was never licenced by Dover…Bet you’re even more perplexed now
Can’t check what doesn’t exist
When an SOA is not done then it can’t be checked can it
I cannot understand why ANY AFSL could seek to continue a relationship with a foolish adviser when breaches and theft are the order of the day
I believe the only relationship Fuoco had with Terry was that WRM “engaged” (or so it seems from review of his compliance documents) that all SOA’s from WRM were purportedly reviewed by mcmasters solicitors; but they were found not to be the case as there was no record of such reviews.
that’s about the only link i can find
I can speak with 100% certainty on this point: McMaster never met Fuoco and never reviewed an WRM advice despite the ever so expert but sadly uncorroborated evidence of ASIC’s expert witness in ASIC v WRM.
WRM pinched Dover’s compliance manual and falsely claimed McMasters’ Solicitors reviewed every SOA.
Neither ASIC or its expert witness bothered to check with McMaster.
Why ring?
Clearly the biggest perpetrator of misconduct was and may well remain ASIC.
ASIC is corrupt, biased, inconsistent and flouts any legal procedure or rules as they wish, and yet expect us to be innocent alter boys that they can bugger at whim.
An overhaul of the system, starting at ASIC needs to be undertaken immediately, and any findings of wrong doing, corruption, collusion or bribe taking to be exposed and the perpetrators taken to court and lose of any prior government super or past entitlements or wages to be repaid in full.
AY-MEN!!!!!!
It all started way back when ASIC Report 413 was ‘constructed’ and has just followed on since then…
Well McMaster is even worst, lodging false allegation against advisers s.912D notices when it was his own fault by having the wrong agreement in place. Then bribeng an ASIC officer are only a few things that McMaster has been upto. Have a look at some of the court cases.
Care to provide the names of these court cases?
If your allegations are indeed true then why has ASIC not made mention of such conduct? Or are you just a disgruntled ex adviser who Dover correctly reported for breaches?
Can you name a case?
Wasnt that the point of the RC, to find weaknesses and overhaul the system…but somehow ASIC seems to have escaped this?
Terry v ASIC. The same applies to every argument. The truth lies in the middle.
There is no middle in this one mate . When . by doing right, you show up the egg on the face of the powerful there is no limit to what they will do to destroy you.
If I am reading this correctly, the only claim that ASIC used the whistleblowing to close Dover comes from McMaster, not the ASIC documents – there is a difference between identifying issues with management (which ASIC does according to the article) and then closing a business (which McMaster claims).
Maybe the headline should read – McMaster claims ASIC used Dover whistleblowing to shut licensee down?
Level playing field for all must be had otherwise trust in the regulator is gone.
This one rule for one and then hanging smaller guys for headlines is not cool.
SOMEONE went to asic on dover imo. asic are very silly and believe anything anyone tells them who has a grudge against them. so basically guys- if you want to shut someone out of business run to asic and asic will shut them down and not look at the facts. UNLESS YOU A BANK or industry supper fund,.
Yep. The reporting to ASIC by Jeff Morris pretty much proves your point.
interesting. what sort of due diligence did dover do on fuoco before authorizing him. the guy ran a number of scams
From what I can establish, he wasn’t authorised by Dover. WRM held it’s own AFSL. WRM’s Compliance Manual stated their advice was checked by McMaster Solicitors which may or may not have actually happened – outside of the control/responsibility of Terry McMaster.
This never actually happened. As a former AR of WRM they did not send any files to be checked off by McMasters team. I am pretty sure this is why McMaster breached them to ASIC.
He was never authorised. We completed the neccessary due dilegence and reference checks which uncovered that he was not suitable for Dover, or any AFSL for that matter. [b]What followed was ASIC then awarding Joshua Fuoco’s crew an AFSL[/b] which led to many clients being ripped off for a long period of time, despite Dover’s whistleblowing actions. Instead of ASIC acting swiftly, they instead choose to allow Wealth and Risk Management to operate for several years longer.
Read the Wealth and Risk Management ASIC banning order again if you would like more detail.
Dover never authorised Fuoco according to his adviser register