Non-bank dealer group Dover Financial Advisers has announced a shock closure of its AFSL, with its 400-plus authorised representatives unable to provide new advice from today.
An email sent from Dover director Terry McMaster to Dover advisers today, obtained by ifa, explains that Dover’s AFSL will be cancelled.
“Following an agreement reached with ASIC earlier this week, I am writing to inform you that Dover Financial Advisers Pty Ltd will cease to operate as an AFSL,” the email said.
“We have been negotiating with ASIC about the most orderly way for this to happen.”
The letter indicates that the authority of all Dover advisers will be withdrawn and no new advice will be able to be provided from today.
“Dover’s authorised representatives may implement advice in the period to 6 July 2018 provided the instructions were received from their clients on or before 8 June 2018,” the letter confirms.
“We very much apologise for the short notice,” it continues. “The above was only agreed in the last 72 hours.”
It also apologised for the "impersonal" medium in which the announcement was made, explaining that contacting advisers individually was not feasible, before re-emphasising the terms of the ASIC agreement.
“It is very important that you understand that, from today forward, you cannot provide any new advice or service to clients. There are no exceptions to this,” the email said.
“Any such advice or service will be in direct contradiction of ASIC’s requirements.
“As you can imagine, ASIC are watching the way that we wind the AFSL down very closely.”
The letter also confirms that Dover’s staff will be “discontinuing their employment with us in the near future”.
It does not offer any substantive reasons for the closure, explaining that Dover will not be able to provide advisers with “any further information about [the] negotiations with ASIC”.
However, Mr McMaster does insinuate that the fallout from his evidence to the royal commission’s second hearings has played a role.
“As you know, our business has been under substantial public scrutiny in recent months,” he said.
“If the last six weeks have shown us anything, it is that it is easy for statements to be interpreted in ways other than how we expect.”
The letter concludes that the mission to provide a “direct, unconflicted model” for financial advice became “impossible”.
Dover has 407 authorised representatives as at March 2018, according to Adviser Ratings.
Mr McMaster famously collapsed on the stand while being cross-examined by counsel assisting the royal commission Mark Costello QC.
During proceedings, Mr Costello described elements of Dover’s business model as “Orwellian”.
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