Dover Financial Advisers was slapped with a penalty of $1.2 million while Terry McMaster was ordered to pay $240,000 over Dover’s Client Protection Policy – despite Federal Court Justice Michael O’Bryan finding it was “unlikely that any consumers suffered loss or damage as a result of the contravening conduct”.
“In my view, the Client Protection Policy had real potential to mislead consumers into believing that they had no legal recourse against Dover in respect of financial advice given to them when that was not the case,” Justice O’Bryan said in his judgement.
“Such an erroneous belief could have caused consumers very great loss. While the evidence shows that, in the period before the conduct was stopped by the intervention of ASIC, it was unlikely that consumers had suffered loss, the seriousness of the contravention must also be assessed by the loss that the conduct had the potential to occasion.”
Justice O’Bryan had previously labelled the client protection policy “highly misleading” and “an exercise in Orwellian doublespeak” when Dover was found guilty of making false, misleading or deceptive statements in 2019.
“Throughout 2018 and 2019 ASIC’s Enforcement Group repeatedly threatened each of Dover and Terry McMaster with fines totalling well above a billion dollars. One may ask why,” Mr McMaster said.
“We note his Honour’s finding it is unlikely a consumer suffered a loss as a result of the CPP, that Dover did not derive a gain from it, was not aware the CPP breached the law and that Dover co-operated with ASIC (although obviously Dover defended itself in court).”
Mr McMaster said that Dover accepted the decision and will pay fines and costs as directed, but cannot comment further due to “Dover’s ongoing legal action against its former legal advisers”. In deciding the penalty, Justice O’Bryan said that Mr McMaster had displayed “little if any contrition for the wrongdoing”.
“In cross-examination at the penalty hearing, Mr McMaster maintained that if ASIC had expressed its concerns about the Client Protection Policy to Dover in a timely manner, Dover would have stopped its misleading conduct immediately at that time. Mr McMaster maintained that ASIC was at least partially to blame for Dover’s contraventions,” Justice O’Bryan said in his decision.
“Mr McMaster continues to hold the views expressed above. Given the lack of documentary support for those views, I find that the views have arisen from Mr McMaster’s unwillingness to accept responsibility for the wrongdoing the subject of this proceeding and desire to blame others, particularly ASIC, for the events that occurred.”
ASIC welcomed the judgement, saying the purpose of the client protection policy was “to exclude or limit Dover’s liabilities to clients to its own financial benefit”.
“The significant penalties handed down today demonstrate the seriousness of this misconduct and will act as a deterrent to others who believe they can get away with similar behaviour,” said ASIC commissioner Danielle Press.
Let’s see what happens to McMaster in the coming weeks. He thinks this is all over
It is a pity that the Court did not ask why no client of Dover suffered a loss. I was a Dover adviser and can assure you they spent heaps of time and effort making sure our advices were up to scratch. At the time it could be a pain in the ass but it probably explains why no one suffered a loss: the system did not let bad advice get to clients. I never understood why ASIC went so hard on a group that was actually by far the most client-focussed group I have been a part of.
Agreed, I found the same. I was happy that all SoAs were checked prior to presenting. Took a bit of extra time but it was worth it.
It is clear this is a hatchet job for which ASIC and the court system should hang their heads in shame.
Consider what ASIC wrote in 2017 about NULIS who had done nothing to remediate clients who they had knowing and fraudulently charged fees for doing nothing.
“ASIC has imposed additional licence conditions on the Australian financial services (AFS) licence of NAB’s superannuation trustee, NULIS Nominees (Australia) Limited (NULIS), following breakdowns in internal procedures.
The conditions require NULIS to [u]engage an ASIC-approved independent expert to assess and report on the adequacy of its compliance and risk management practices[/u][u][/u] for its retail and wrap superannuation funds. NULIS has agreed to the conditions, and KPMG has been appointed as the independent expert.”
And ASIC done nothing about AMP either… But when it comes to targeting small fish …
Someone in ASIC is or is linked to the “independent expert”? In any event, I guess NAB is a better future employment prospect for ASIC staff than Dover ever was? Perhaps Dover was taking to much FUM from the big boys and ASIC stepped in?
It is a very bad smell that should not occur in a first world democracy in my opinion – but we seem to be driven by agendas.
The more I look into all of this Dover stuff the more it seems that it’s all about Terry being unlikable & arrogant rather than actually something wrong being done. The CPP is just an excuse.
“…..it was unlikely that consumers had suffered loss, the seriousness of the contravention must also be assessed by the loss that the conduct had the potential to occasion.”
Wow, Australia now punishing people for crimes they might…..?
Hadn’t you heard? ASIC have the powers to (and they have) ban an Adviser if they feel they MAY be a threat or MAY break the rules in future. Apparently they have their own Minority Report future-seeing machine now
A bit like planning a bomb attack, getting caught and then saying that, since nobody got hurt and they would have stopped immediately if told to do so, any penalty would be too harsh. Dover was a blot on the advice landscape and Terry McMaster’s extreme behaviour shows that.
A blot on the landscape? Maybe keep quiet unless you know what you’re talking about. Good boy.
And at the same time ASIC was chasing Dover for a document that could have been changed if it was so seriously wrong, Melissa Caddick it appears did not even a document to remove client protection and or cause client harm – but ASIC was clearly more interested in the POTENTIAL harm from Licensed Advise to worry about unlicensed advise. Well done ASIC – congratulations again.
Attempted murder doesn’t kill anyone, what’s the harm?
He only tried to screw over his clients – if ASIC had told him to stop trying to screw over his clients then he would have stopped immediately. It’s really all ASIC’s fault for not telling him to stop trying to screw over his clients.
He broke the bloody law. What type of messed up person would defend the behaviour of someone who is convicted of breaking the law?
You ever broken the law?
Or you mean the legal advice in relation to the CPP he received was incorrect. The opinion from his legal eagles was that the CPP was fine, whilst the opinion of ASIC was that it was against the law. Anyway, imagine the time and cost that could be saved if ASIC pointed out their problems with the CPP and had Dover rectify it but unfortunately that would be too simple.
He didn’t try to screw his clients. That’s the point. The finding clearly says Dover didn’t know it had broken the law. He stuffed up, yes, but no one was trying to screw a client.
“the seriousness of the contravention must also be assessed by the loss that the conduct had the potential to occasion.”…i don’t believe i have seen these words anywhere else in judgements against any large AFSL or industry fund that’s been up for misleading conduct. One would consider the decision harsh given all the other AFSL’s that got out off with a slap on the wrist for their misleading conduct. I hope the 400 odd ex Dover AR’s are coping ok as the collateral damage in this playground bully fight.
Terry, the CPP was silly and you are paying the price, a very expensive price that is for sure with Dover shut down by ASIC and fines as such.
Imagine if the CPP had actually caused any financial client losses = Terry would be locked up.
Now compare this to the Big Banks Fees for No Service. Intentionally and knowing stealing from clients accounts all the while with full knowledge of zero services provided. $$$ Billion Stolen.
How many charges against bank Execs ? ZERO
Yeah spot on. The law is an ass as is ASIC. One law for the rich and connected and one for the rest of us. That no Big Bank exec’s have been charged is beyond comprehension and nothing short of shameful.
“The significant penalties handed down today demonstrate the [b]seriousness of this misconduct[/b][b][/b]”
Danielle, given ASIC knew about this for over 12 months, if it was that serious, why didn’t you have Dover change it?
Looks like ASIC denied that – or just said nothing (like they did paying people to write submissions)?
“…the lack of documentary support for those views…”
The more I know about ASIC the more I worry.
A little birdy told me Dover received compensation from ASIC? Any truth to this?