On Friday, 8 June, ifa exclusively reported that Dover Financial Advisers will be closing down, leaving almost 400 authorised representatives seeking alternative licensing arrangements before 6 July.
ifa can now reveal that the Commonwealth Bank has taken action regarding Dover advisers that recommend products offered by its CommSec Adviser Services and Colonial First State businesses.
In a communication to clients of Dover authorised representatives, obtained by ifa, CommSec Adviser Services 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).”
CBA subsidiary Colonial First State has also taken decisive action.
An email from a senior member of CFS’s dealer and adviser operations team to authorised representatives last week, seen by ifa, confirms that existing fees and commissions owed to Dover advisers and clients will be suspended.
One Dover adviser, speaking to ifa on condition of anonymity, said he was “disgusted” by the action taken by the bank in regard to suspending access.
“None of my clients have withdrawn my service agreement with CFS and I believe that any ongoing advice which has been previously approved through the Dover compliance process can still be provided,” the adviser said.
“In the absence of a specific banning order from ASIC I do not believe I am breaking the law.”
A CBA spokesperson did not confirm or deny the evidence in the communications, offering a broad statement on the matter.
“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.”
[quote=Anonymous]just because the only good thing you did in your lives was buy a house for $35k, 40 years ago, u are now 80 years and still living on your grandfathered trail commission doesn’t mean everyone else is in exactly the same position as you numbnuts
i can’t wait for the exam which will be the end of you both as you won’t pass [/quote]
Lol, yep. Majority of ‘experienced’ planners would have never built their business without the ridiculous commissions, sales culture and lack of compliance when they started. Dumb luck.
[quote=Anonymous]just because the only good thing you did in your lives was buy a house for $35k, 40 years ago, u are now 80 years and still living on your grandfathered trail commission doesn’t mean everyone else is in exactly the same position as you numbnuts
i can’t wait for the exam which will be the end of you both as you won’t pass [/quote]
For the record I started a business a few years ago, did not take on debt. Do not have any grandfathered trail and have grown my business to now have a number of staff and can’t keep up. Why because I am a good adviser.
I will pass the exam comfortably and will continue to advise for another 20+ years and bought my house for 10% less than it’s worth now.
So yeah, I feel qualified to comment and my original post stands.
Geez- these banks are even more brazen than anyone could ever imagine. What planet do these executives live on? Oh yea planet ASIC of course. Always in their pocket. Go after the small fries.
All 400 Dover advisers should start a class action against the CBA and ASIC over this bullying and fight back. Its the VIBE. When is ASIC going to grow some and ban CBAs licence??????
Maybe its time that advisers decide it isnt in a clients best interest to have CBA and Colonial Products, for their clients, given that they ( CBA ) just shut the door on what im sure are many law abiding ethical advisers, who now cant assist the clients, how the hell are CBA giving a bugger about the clients in this scenario. vote with your feet advisers
do you really think these institutions care about the clients. what a laughable notion.
Dover advisers unfortunately got what they paid for…
not fair. dover advisers are going to hit the wall most will go bankrupt
that’s true I have just spoken to a young ex dover adviser who is going to go bankrupt. he has two kids under 5 he is in a negative equity position because house prices have gone down 20% in his area and he borrowed to get into business
a young family man is now going to be ruined and he did nothing wrong
Seriously, if your’e a financial adviser who goes bankrupt because you dont get paid for a month or two you have issues.
If he was any good (and I hope he is and this is happening) he would already have a new dealer group lined up and background checks underway
Exactly right, if it isn’t fake post, this person shouldn’t be a financial planner, full stop! Buying a house where property prices have fallen 20% while breeding? Stupid! Maybe the clients of the practice will see another planner pre-30 June as the big baseless concern of many. I find it hard to start agreeing with myself!
just because the only good thing you did in your lives was buy a house for $35k, 40 years ago, u are now 80 years and still living on your grandfathered trail commission doesn’t mean everyone else is in exactly the same position as you numbnuts
i can’t wait for the exam which will be the end of you both as you won’t pass
You’ve hit the nail on the head.
There is a much broader intergenerational issue building up across a wide range of areas, and we see it here now a well.
Many (not all) of the baby boomers think their success is purely through their own skill as opposed to part-luck (at the least) of riding the waves of a system built in their favour given their voting power as a demographic block.
Well Baby Boomers, guess whose voting power will equal yours in the coming years?
Interesting times ahead….
CBA needs to clearly state that these funds are being held on the advisers behalf and will be paid once AR status is back in place. If they won’t do this – we need to presume they are keeping the money – which even for the CBA is a stretch surely. I’m not Dover, but feel that we as an industry need to politely let our CBA BDM know that this is not acceptable. Non Dover advisers expressing displeasure adds weight. Advisers need to stick together people. Polite email to CBA – on the way.
think dover will keep the money advisers will be out of pocket
Moving way too quick on that one CBA. That’s the thanks those advisers get for supporting your business in the first place…
Surely if Dover issue a deed of release of the clients to the Authorised Representative, the AR should then be entitled to act on their client’s written instructions and retain authority on the account, along with any fees due, without Dover. The only issue then is providing new advice as an AR & needing an AFSL in order to do that.
What ASIC is really saying in this move is that an AFSL is not a safe place to conduct business or look after your client’s best interests as an adviser. The system that requires an adviser to work under an AFSL therefore appears to have it’s days numbered if there is no certainty for the people who have the qualifications and experience, who have built businesses, and most importantly have clients to look after. How can ASIC come in and cause it to close down at any time?
Almost have to wonder whether the ordinarily toothless tiger going after Dover was just the catalyst for FASEA becoming the new overseer and AFSLs becoming defunct. Or is there another agenda? There must be an agenda here surely, especially so close after the RC. I guess it’s taken the spotlight off the bad behavior of others? Not helping the industry as a whole though, or the qualified advisers who are working hard to help their clients.
i am with you. let’s end the AFSL, and have fasea be the new overseer with whom advisers have to register with. after 2019 all new entrants have to have a degree and within 5 years many others who do not want to do further study will leave so it will leave a very small number of advisers to oversee. i would estimate based on the uk example – where only 5,000 IFA’s remain – that we would have a similar number here also. about 5,000 advisers out of the 22,000 approximately registered currently
The Silence from the FPA is now a Roar as to whose side they sit on…and it’s clearly on the side of Bank Aligned advice. Isn’t a professional associations role to promote confidence in the Advice industry. To sit back and say nothing is extremely odd. Why is they can spit out a press release of support when CBA gets in trouble and nothing is said now?
My membership renewal came out to me recently, still in two minds as to whether i’ll renew it. Maybe if I get the same rate as the CBA & AMP planners i’ll think about it
please don’t renew it time to stop being members once they stop getting paid they will listen
CBA… the new moral and ethic guardians of our industry! We have come a long way when this occurs………..
And now they can refer all these clients to CBA Advisers! Someone will get a pretty sweet bonus for that!!!
why would any new entrant come into this industry. seriously i use do love our industry helping clients each day. now i see my friends on weekends and they like why would you waste your time in this industry anymore. we do all the hard work/ where all the risk… find another occupation that does?. i be staggered in 3 years to see who is left…
Havent used CBA / CommInsure / CFS for some time but have some residual business there, but not for much longer. Ironic that CBA who were one of the biggest contributors to the need for a Royal Commission seemed to have escaped any penalties at this stage but are now carrying on like a paragon of virtue re Dover. From the scant info thats been released, it seems like ASIC has had an issue with the actions of the AFSL not the individual advisers & there were no client losses, whereas CBA it was the advisers going rogue & actually losing money for clients. When is ASIC going to shut down the CBA linked AFSLs??
Yeah, I dont get it either Jimmy. What an absolute joke this is, CBA now acting as if they are some sort of ‘holier than thou’ enterprise although they are clearly much worse. AMP probably do the same next… Feel for Dover advisers and their clients.
The only good thing about this Dover debacle is that it is now exposing some of the horrendous abuse independent financial advisers have to put up with from ASIC, dealer groups and product providers. I hope the Royal Commission turns their attention to this unfolding crisis because it is a bloody disgrace. This will be causing a great deal of stress and anxiety to thousands of clients, employees, small business owners and their families. It is a shocking state of affairs. We urgently need ASIC to grow up and put some fair and reasonable rules in place to minimise the damage. This situation should NEVER to repeated. These are dark days for independent advisers.
Unfortunately I get the feeling this is exactly ASIC’s agenda. From their comments and rhetoric to date, it seems that they view planners as nothing more than rats, and cleaning out the Dover nest was in their eyes a good start… From their lack of action investigating ISA fee for no service and stated ‘no intention’ to look at any ISA advice (which the joke of a RC let go without challenge), I also get the distinct impression they would be happy if there were no planners and the other paragons of virtue, Unons, controlled all Australian superannuation.
Correct. We take up a lot of ASIC’s time and we cause them endless shame. They do not like us or need us. There is only one way of getting them off our back, and that is by charging a fee for the job done, when the job is done…not throughout the year from someone’s super fund. Even better, don’t recommend product if possible, just charge for the advice. The client will need to implement themselves with the help of the friendly product assistance people. “…but people won’t implement our advice if we don’t do it for them!”…i hear you keep saying. Not your problem. Give the advice, charge for the advice…NEXT.
Ahh commissions…the root of all evil.
Ha! CBA…What a bunch of hypocritical knuckleheads! Didn’t they recently admit to lying, cheating, stealing money from dead people, falsifying documents, among many other egregious acts, on the witness stand at the RC? So now they say “Like all providers, we need to consider both advisers and clients’ best interests.” Since when did they start to consider best interests of their clients? They only consider CBA’s interests & lining their pockets with cash. You don’t need to be Einstein to work out how CBA will play this out, and make a big quid…”you poor unfortunate client…those bad, mean & nasty Dover advisers were no good…no adviser to go to Mr Client? Have a talk to one of our financial planners…obligation free…they’ll look after you!” How long does the industry have to put up with this rubbish? ASIC, WTF are you? Why can’t you nail these CBA bozos in relation to their RC admissions? Prosecute and bounce a few of them for a spell in the big house…that will make the rest sit up straight & take notice! But no, let’s lay the blame at the feet of the advisers yet again. And ASIC will knock out a few “enforceable undertakings” for the institutions (AKA let’s all hold hands a pray that all the naughty people will go away). Why does ASIC continue to do that? Because it works like magic…presto! no more bad behaviour! Give us a break!!
A supplier can not pay to any other entity other than an AFSL. Dover will collect the fees until they shut. Dover can not forward the fees until you have an AR. No AFSL, NO AR, no clients no fees.
THEY WILL ALL DO IT.
If you have no AR you have nothing.
Stop bagging out the supplies, you may want to look at Mr McMasters, he’s the one who put you in this position.
Totally disagree. CBA are acting like a bank. No care for the end customer or advisers that support them. Their legal department are rearing their ugly head. The clients and advisers of Dover are the innocent victims here. CBAs response demonstrates why they failed in the wealth management space.
The problem is, the advisers are ARs until July 6. I even got caught up in this despite changing licences because as far as their internal systems showed, I was still a Dover adviser despite having an AR certificate to prove I wasn’t and a pending release letter. CBA are a disgrace.
The payment of advice fees to an AR solely based on them being an AR is not a legal requirement. It’s a contractual agreement between the advisers, the product payer, the client stating Colonial will pay fees etc to the adviser whilst ever they are an AR. Thus like any contract the terms can be amended or not enforced.
Really? Didn’t anyone see what happened during the Royal Commission? The platform was criticised for paying revenue to advisers (and asked when they were going to stop paying grandfathered revenue). The onus is now on the platforms, so what else could CFS do? They simply can’t pay revenue to a person who is not an authorised rep of an AFSL. They are not being bullies – 70% of their business comes from IFA’s – just ask them.
Wrong. The businesses and planners are still AR’s until 8 July when the AFSL closes, hence this is reprehensible moral postulating by CBA and likely profitable for them to boot.
A bit different DGH. The issues at the Royal Commissions involved orphan clients. No orphan clients here. Advisers and clients have private agreements going with CFS, to pay fees on the basis they are AR’s. This is not a legal requirement it’s a contractual obligation. It’s a contractual obligation that could be ignore for 2/3 weeks surely. However they’re playing strictly by the rules and so it seems like they play by the rules when it suits them.
I’ve just emailed my concerns to my CFS BDM that the powers to be would act in this manner. Fair enough if the Dover advisers aren’t able to find a new home by the deadline next month but my understanding is that they are still AR’s until then. Very stressful time for the advisers at Dover who I’m sure on a whole are doing the right thing for their clients (the one’s I have met over the years anyway).
This is rich! The ‘gold medalist for fees for no service’ has become the compliance police?
Someone once said there is nothing so moralistic as a converted harlot. Now CBA, a product manufacturer, probably looking to get some brownie points with ASIC, are playing hardball. Of course all this goes to prove that advisers in our current licensing system are merely serfs in a very feudal bureaucracy. Let this whole Dover affair be a lesson to advisers with any AFSL.
I am aware that about 10 years ago one particular small AFSL decided not to pass on ongoing risk renewal commissions to an adviser because they were having a philosophical dispute about the services being provided by that AFSL. ASIC were informed and chose not to intervene
It’s a disgrace. I had already left Dover and was in the middle of transferring over my accounts to my new group. I had agreed to move to this group before Dover announced closure and still have been caught up in this rubbish. The CBA are a disgrace.
Advisers are small business against big a bank with a big legal budget! Of course the bank will crush them. The Royal Commission has only scatched the surface as to how big banks destroy the lives of small business persons. You cannot win, so you struggle on and hope for the best.
Just a big bully!
Wow the biggest sinner now acting holier than all, interesting to see if this action is legal and if the fees are reimbursed to clients or as usual added to their cba – cfs revenue. Dover people, when you resume being an adviser, I guess certain products won’t be on your favoured list, maybe you request backdated fees or ask Dover to accept no fee payments to be credited to your dealer fees in lieu of actual payment. Cba/cfs you have a bloody hide. .
Why be disgusted? If you aren’t an AR you ARENT allowed to act on your “clients ” behalf. Any service agreement between the adviser and the client terminated with the loss of AR status
No AFSL, then there is no one to pay any fees too, and the providers aren’t allowed to hold over fees whilst waiting for the adviser to find a new home, those fees are gone.
And if the adviser hasn’t got a new home prior to Dover shutting down its AFSL, don’t think any one is just going to hand back the clients if/when they do. No AFSL = No AR = orphan client.
The farce isn’t over yet by a long shot!
The AFSL actually closes down on the 6th of July. Last time I checked it wasn’t the 6th of July yet.
This seems hard to fathom. Dover’s license continues to operate for the time being. Dover has said that its advisers still have authority to execute advice that had been given before 6 June. Expect to see a lot of backlash against CBA.
its true
I presume that CBA will direct the “Adviser Fee” retained back to the client?
Surely they will not be dumb enough to keep it……..oh wait it is CBA, of course they will keep it!
yes CFS been trying to steal advisers clients…and getting away with it. .
CFS have their own “Non-advised client fee” which they no doubt will be using and profiting from.
OK – now Xdover advisers need to sue ASIC for slander and Sue CBA for restraint of trade – enjoy your new houses you will win !
I personally know of another company trying to work out if it is legal to do the exact same thing. Watch this space. Very tough on the business owners…
WOW ! Nasty !!!
Way to go CBA. No problems with your own advisers, but find a way to screw over 400 advisers of an IFA and you can’t wait.
I look forward to the next call from a BDM from CFS or CommInsure