ASIC has just now issued a statement announcing an EU and its intention to cancel Dover’s licence.
The statement explains that the cancellation follows an investigation into Dover, primarily relating to the licensee’s so-called Client Protection Policy – which came under scrutiny at the royal commission’s second hearing – and its director Terry McMaster.
“Due to his significant involvement in this conduct, ASIC was concerned that Mr McMaster, in his individual capacity and in his capacity as a responsible officer of Dover: is not of good fame and character; impaired Dover’s ability to provide the Financial Services covered by the AFSL; and is likely to contravene a Financial Services Law in the future.
“ASIC was concerned that by intending to rely upon the Protection Policy Dover had failed deliberately and systematically for over two years to: comply with its obligations to act efficiently, honestly and fairly; comply with financial services laws; and take reasonable steps to ensure that its representatives comply with the financial services laws,” the statement said.
“ASIC considered certain terms of the Protection Policy to be detrimental to clients and unfair under section 12BG of the ASIC Act because the terms: created a significant imbalance in the rights and obligations of the adviser and their client; and were directed to protecting the interests of Dover and its authorised representatives in avoiding liability to a client for bad advice.”
The cancellation was first reported by ifa on Friday 8 June, following an email from Mr McMaster to authorised representatives that referred to an ASIC negotiation and agreement.
The email was coy, however, as to the underlying reasons for ASIC intervention.
A subsequent statement from ASIC confirmed than a formal investigation into the licensee was commenced in 2017, but again gave no details of the conduct in question.
Dover’s almost-400 authorised representatives are currently in various stages of transitioning to new AFSL arrangements.
Under cross-examination at the royal commission, Mr McMaster faced questions about the ‘client protection policy’, which counsel assisting Mark Costello QC described as “Orwellian”.
Dover’s AFSL will be cancelled on 6 July.
The investigation into Dover is ongoing.
This is absolutely appalling. An AFSL setting the real standard for how it should be done, being closed down because ASIC cannot abide the hard truth about the fact that it cannot protect consumers from crook advisers and that in the case of a crook adviser breaking the law AND their AFSL ‘s strict conditions then the PI insurance does not work so everyone is under an illusion and their jobs are a waste of time. Terry Mc Master has been screwed for pointing out the facts and sticking to the truth. .Ispent time as a Dover adviser before retiring with cancer ( all fixed now)… In my first life I was a private Licensed LAnd Surveyor ( sold out in 1982) . If I had made a mistake in say 1980 and put a Woolworths shopping centre 1cm over the boundary into the adjoining land and that was discovered today they could still sue me for squillions. Fact is there is only ONE protection and that is to do everything absolutely properly and to check and double check and keep records and be prepared to defend, The insurance, the membership of professional bodies, is ALL bullshit . Terry is right.
terry come back….. where you at matey?:D
Is talking to yourself a sign of madness?
Without the fig leaf, they are all naked.
Oh lordy, just when you think the ‘profession’ can’t become any more circus-like..
so embarrasing, i am going to tell people at bbq i am a used car salesman
Look at groups like Sentry and see how they have handled Enforceable Undertakings. An alternative approach would be for Terry Dover to remain a shareholder in Dover but for him to step down as an Executive or a key person. Other parties could have been invited into Dover to provide separate lines of reporting and so called Chinese walls. The need to close one of Australia’s largest privately owned licensee’s due to the poor process could have been avoided. There is more to this story and I suspect the timing with the Royal Commission report being released in September had some part to play as well.
reading between the lines., did Dover even have PI cover?
Every agreement or contract I’ve ever signed with any professional services business (especially with Solicitors) for personal or corporate work has been written in a way that favours/”protects” the person giving it (ie the “vendor”). That’s part of the reason for having an agreement in the first place before providing services, and it also sets the foundations for the relationship. So does this mean that ASIC will next move onto the legal industry, real estate industry and then all the others and over-regulate them and remove their contracts and agreements? Business is business. Yes we all do our best to help clients and the majority do so with high levels of ethics, morals and professionalism. Removing the very few protections we have in place for our own livelihood and businesses (especially with the likes of FOS and ASIC not even needing to prove guilt anymore, but just the likelihood there’s risk) is just inviting legal actions to be taken any time the markets drop in value and an ambulance chasing lawyer picks up on the scent of easy pickings. If we’re supposed to be a profession then we should be able to run our businesses like all other professions – as a business and not a charity.
It is absolutely staggering that Dover are forced to shut down over a client protection policy that has cost no clients a dollar, but the AMP,CBA,Westpac have paid back millions upon millions of dollars to their clients who have been poorly advised and have also had Enforceable Undertakings but are still allowed to operate. Sadly these organisations can not be shut down by ASIC as they have the assets to take ASIC on, sadly Dover couldn’t and ASIC has now destroyed many many lives by their very poor decision.
It’s all about compensation, hence why AMP etc stay in business and Dover does not. When a licensee goes belly up under ASICs guard and there’s little to no compensation available, it doesn’t look good…hence the pressure on Dover.
Royal commission into ASIC is required now !!!!
This is the absolute best comment, yet.
A few Dover advisers defended McMaster and the Dover Model through the inital allegations…Saying it was the ‘fairest’ licencing arrangement (ie; cheapest).
Well, you pay peanuts you get monkeys. You sleep with dogs you get fleas.
McMaster has always been a grub, Dover has had a bad reputation. The smart ARs saw the writing on the wall and moved. The remaining ones are either lazy, naive, cheap or stupid. Good luck, you will need it.
Best stay anonymous with libelous comment like this.
Don’t worry about libel – truth (as in the case of the comment above) is a complete defence.
actually they are statements of fact
Let’s not forget that CBA and AMP have friends in very high places (far higher than ASIC – try in Cabinet, present and former PMs maybe?) who put enormous pressure on ASIC NOT to act – just like they put enormous pressure NOT to have the Royal Commission… So, while it’s tempting to throw mud at ASIC, it’s more correct to throw the book at the government, who protect big business over small every time. CBA and AMP are important. Small planning businesses are not. Get your facts and anger right. DO SOMETHING by making it clear you’ll not vote for conservatives who back their mates rather than small business operators. Oh, and tell them we want ASIC better funded so that it CAN go after bigger scalps rather than a few relative minnows. And another thing: get your own AFSL and be independent. Then you won’t have to worry about anyone’s behaviour (or mates) than your own!
Why didn’t Terry call it on 1 July, after the adviser’s clients had made their superannuation contributions??
…and then officially shut down say 30 September??
Because he wanted OUT from what is a nonsense situation. ASIC is only doing the bidding of those who govern us all – and they have NO interest in managing risks to consumers properly. Consumers remain unprotected because crook advisers can do what they want and it’s only AFTER the fact that a) their AFSL, then b) ASIC (if the breach is reported to them by the AFSL) knows what happened and might take action…. Meanwhile the consumer has lost out and the PI cover won’t stand up to scrutiny because the act was illegal and the adviser doesn’t have cover, only the AFSL does. And THAT’s why Terry got out, because he saw the whole mess as an impossible situation for him. I think he’s perhaps one of the few who is being honest about this mess…while ASIC dares not say (or doesn’t know) that they are powerless to protect anyone!
the whole industry is farcical
What I read here is ASIC, the pathetic attempt at a regulatory body, piggy-backing the closure of an AFSL to make itself look like the ‘good guy’ and try to appease the royal commission. How many reports of proper misconduct have ASIC sent “thanks but not interested” letters to
Ack to sleep ASIC back to sleep.
This latest stick prodding should enable you guys to go back to your desk and get back to what you do best, looking on gumtree and ebay for personal shopping.
Every now and then some low hanging fruit enables you to cherry pick and go back to hibernation. Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzz, sleep ASIC sleep. The next scandal and the next rort will wake you up.
[quote=undefined]undefined[/quote]If an Amp adviser recommends an Amp product, it should be classed as poor advice. I have seen better products in a sewer.
This indictment is RUBBISH ASIC and you know it !
When you’ve got nothing I suppose you can always fall back on the nebulous “good fame and character” test.
Bit late now. This makes it clear that is was the Dover protection policy specifically. How many quality Dover advisers were rejected by licensee’s solely on the grounds they were ex Dover advisers? ASIC press release created the impression that it was a poor compliance culture in Dover and taking on those advisers would result in additional compliance obligations.
If Dover lost it’s license because of the issues outlined here then it’s unbelievable that AMP, CBA, NAB can still keep their AFSL license. The Australian Tax Payer and the Financial Planning Community has collected the sum total of $ZIP from these institutions. The ASIC levy on licensees should be SCRAPPED and ASIC should hit the banks with a $700 million fine.
Wow – shutting down over 400 advisers and access to advice for 1,000s of clients over a poorly worded disclaimer. Nothing to do with quality of advice given, conduct of advisers, or the process of the dealer group. *slow clap* well done ASIC
Surely this logic must apply to AMP? I’m sure ASIC will take a big scalp & crow about it, but just as they’re about to relinquish their license anyway
Geez, couple thoughts on this:
1. Did ASIC really need to throw 400 advisers under the bus because McMaster wasnt up to it? Couldnt come to an agreement to get him an appropriate replacement to allow them to keep servicing their clients?
2. Nowhere near as bad as CBA/AMP
Silver lining is hopefully other dealergroups will now start considering Dover advisers (on a case by case basis) with this “clarification”.
Over 400 business closed, thousands of staff and tens of thousands of clients impacted. WTF are ASIC doing!
Why not just remove the “unfair” clauses from the Client Protection Policy? Doesn’t seem right
I thought they did after the RC?
They were removed and every client was notified according to ASICs strict direction….just weeks before the RC. Witch hunt and scape goat 101 #putoutyourbroomsticks
Or just remove Terry McMaster from being a responsible officer / Director of Dover?
But alas, with an ongoing investigation by ASIC, more dirty Dover laundry may be aired.
I suspect Terry McMaster and the rest of the Board at Dover pulled the pin for a couple of reasons, the ongoing reputation damage and cost of an EU; and to limit/decrease the risk of personal financial damage (best of luck with the ”class action”, waste of time/money/effort for the minimal/no return).
They did
It was- long before the RC. in additiona, all clients who received it were notified of the changes, and that it would not be relied on.
Nah you can’t just “remove” clauses. If you have failed to comply with the law, then that’s it. Game’s over.
Sure it wasn’t persistent nit-picking on subjective interpretations of Best Interest issues that made life impossible and encouraged Terry to say “ASIC go to hell”? Sure the Client Protection Policy isn’t a smoke screen for badly worded legislation and inadequate Regulatory Guides?
ASIC has had since 1 July 2013 to put up examples and give guidance to the industry and have needed a committee and 6 months work to do one SOA on insurance (RG90). The recent finding of 91% of SMSF advice files failing, points to an abject failure of ASIC’s direction to the industry. The industry needs to call this out as evidence of ASICs failure rather than ours. If 90% of doctors couldn’t diagnose a common illness – would we blame the Dr or the training?
Many other licensees have had EUs and worked through them. This bloke just figured it was too hard, jumped ship and left advisers, clients and staff high and dry!
This is NOTHING compared to AMP and CBA conduct. ASIC won’t dare cancel their (various) licenses! Gutless.
What utter disrespect from ASIC for the 400 advisers, their clients, employees and their families. These advisers were thrown into chaos at the busiest time of the year, with ZERO warning. It takes 6 months or more to apply for an AFSL and at least 3 months to properly investigate and complete due diligence on switching to another dealer group. These poor sods were forced into a desperate scramble to save their businesses. God knows what sort of unfair contracts they were forced to sign. I hope Kenneth Hayne turns his attention to ASIC because they have serious questions to answer over their behaviour in this matter. I don’t think anyone gives a stuff about dealer group heads, but the vast majority of advisers do good work and care about their clients. They don’t deserve to be treated with such callous disregard.
We don’t think every adviser under Dover is corrupt. We think ALL advisers in ALL dealergroups are corrupt.
Only AFA members are corrupt
Takes one to know one!
Whoever you are ASIC that’s a bit of a stupid sweeping statement. Doesn’t really add to the debate or any intelligence to the issue.
Maybe it doesnt but most advisers would agree with the sentiment
So I guess ASIC will be closing down AMP for Bullshitting at the RC. CBA too.
VERY HAPPY to hear that Dover’s closure was not due to the planners.
This has to be a class action against McMaster from 407 advisers…….It has to be!!
class action against ASIC perhaps?? Where was the standard remediation protocols such as license restrictions or supervisory EUs?????
or against ASIC
he will have all his assets in his wife’s name and he’ll declare bankrupt. They always do.
yeah terry is da bomb he already did dat
So let’s get this right, ASIC had issues with the director of Dover, and thought the right decision was to shut down 415 businesses with a flick of the switch? Clap Clap, genius work ASIC. Unbelievable incompetence.
And then tell all those clients that their adviser could not provide advice,
And then tell other AFSLs that they will be scrutinising any AFSL that puts on an ex-Dover adviser.
And then there’s still no substantive action against AMP or the Big 4 Banks apart from the occassional adviser.
Didn’t ASIC also investigate STORM 9 months before their collapse and give them a check of approval? How much did that cost investors? Of course it was ethical advisers who alerted ASIC in the first place just like Jeff Morris who persisted with ASIC for 18 months giving them all the dirt on CBA and trying to get them to do something…..UNBELIEVABLE INCOMPETENCE!
No kidding, turn the lights out in no time here but then let storm advisers continue to leverage up retirees into index funds for almost a year for laugh.
Terry was the responsible manager and owner of Dover. Maybe understand the role and obligations of a RM before criticising ASIC.