Last week, ifa exclusively reported that Dover will be cancelling its AFSL in July, giving its financial advisers what director Terry McMaster acknowledged is “short notice” to find alternative licensing arrangements in order to continue providing advice to clients.
Over the long weekend, ifa has spoken to numerous Dover authorised representatives and has also obtained a chain of email correspondence between advisers affected by the announcement.
In order to respect the confidentiality of these advisers, we have chosen to keep their identities anonymous but can confirm that all of the below quotes are from individuals listed as Dover authorised representatives on the ASIC financial adviser register.
Dover-reaction
Some have responded emotionally to the explosive email from Mr McMaster, concerned for the wellbeing of their clients, staff and families.
“It is quite evident that we are all feeling confused and unhappy,” one Dover adviser said in an email to fellow authorised representatives.
Speaking to ifa directly, another described the prevailing sentiment as being “scared” for their financial situation and the uncertainty of the road ahead.
A number of Dover advisers have told ifa they never received the email from Mr McMaster, instead becoming informed of the decision via ifa’s coverage of the email and notifications from peers. They have expressed particular regret at the lack of communication from their licensee.
“We have a right to know what is going on,” said one.
Others have portrayed a more hard-nosed approach, considering the legal ramifications of the action from Dover and its impact on businesses and clients.
“Dover should be held accountable for our losses,” one Dover adviser tells others in the leaked email chain.
“I am sure we will be able to find a lawyer to take them on if enough of us get on board.
“Maybe this is something we can discuss if we can organise a large group meeting, we can even arrange to have a lawyer present.”
‘Sharing knowledge, pooling resources’
Some have taken a leadership position, seeking to co-ordinate the disparate representatives to act collectively as a community and assist one another to transition to new AFSL arrangements and find agreeable solutions.
“As shell-shocked as we are, we are gathering our thoughts and working on making sure that our colleagues have the support they need in this very distressing time,” one Dover adviser told ifa.
“We are sharing our knowledge, pooling our resources and working together to find new licensees.”
ifa understands that in addition to the email chain, a Facebook group has been established as a support resource for the embattled advisers and efforts are underway for some practices to potentially move collectively to new licensees.
On that note, some have expressed relief that select Dover competitors have come forward to offer assistance.
“Contrary to initial fears we have seen AFSL owners large and small come out of the woodwork to offer to help,” a Dover adviser told ifa.
“Licensees have been working through the weekend to get themselves into a position where they can start to take in Dover advisers.”
The party faithful
While some Dover advisers have expressed anger towards Mr McMaster and the Dover leadership for the unfortunate scenario in which they find themselves, others have demonstrated clear loyalty.
“Dover were the best licensee ethically on the market and the only non-aligned and non-conflicted dealer group that I know of,” one authorised representative told ifa.
Another said the network should stay true to “Terry [McMaster’s] wishes for the [financial advice] industry” and that they should “stand by” their original affinity for the dealer group and its culture.
In his email to advisers last week, Mr McMaster did not offer any reasons for the closure of the business beyond there being a confidential “negotiation” and “agreement” with ASIC.
However, he did indicate that his dramatic testimony before the royal commission had played a role as well as a difficult commercial environment.
“We have always aimed to bring a direct, unconflicted model to financial planning,” he wrote. “Unfortunately, it has proven impossible for us to continue in the current environment.”
A statement issued by ASIC indicated that while it had been investigating Dover since 2017, the ultimate decision to close the licensee rested with the Dover leadership.
Mr McMaster has declined a request for interview.
Do you know more about this? aleks.vickovich@momentummedia.com.au
There is no secret that Dover was the place of least resistance for advisers running out of options. Any AFSL looking to recruit must do their due diligence. Remember AAA and what happened to Guardian????
Ridiculous comment. We did our due diligence re licencees 1.5 years ago and decided that Dover was one of the few fitting our ethical standards. Have been an adviser for 21 years and left an aligned group out of my own free will. There are many others like me who chose Dover for their highly ethical standards. Yes, they did not like the banks as they forced( and still do, even after the RC) bank planners to sell their own products. Terry McMasters had a different approach, which I suspect lead to his demise. By the way, their due diligence on onboarding us was an extremely onerous and a detailed process, so not really easy to join. It is so easy to make all there comments when you never were really involved with Dover
If the responsible managers of an AFSL have any brains they will not authorise a group of Dover advisers. Some Dover advisers will find new homes with reputable AFSL’s but that will be after separately each one goes through a proper due diligence process. The more difficult the process the better the licensee , and Dover advisers who believe they are high calibre planners that think the quick fix sign up is the answer should think harder recalling how easy it was to join Dover. Terry wrote regularly emails out to other AFSL lists of advisers trying to recruit blindly and this is the outcome
Many adviser went to Dover because it was cheap. It was cheap because they did not have the resources of other major unaligned dealer groups. As a fund manager with over 20 years in the game I constantly get planners looking to leave aligned groups and there are plenty of quality groups to refer them too. The feed back I got on Dover over and over again was that as soon as the regulators took a close look at them they would be shut down. I am constantly astounded that anyone could be confused why the are being closed. Don’t shop around for a dealer group based on price its that simple. Look for experienced adequately resourced groups with a culture that best fits your back ground and you shouldn’t be disappointed.
most of the other AFSL’s prices are similar
With no warning and no explanation, it is easy to be confused. Is it wrong to expect the regulator to provide some basis or are they just free to do what they like?
I paid my last dealer group $35K and in return I got a 2 x PD day that lasted for 3 hours and an annual audit that was an audit of the previous 3 years files. One year in 2011 I got a Christmas card as well. I don’t think Dover advisers have a leg to stand upon. I’d be focusing on finding a new AFSL.
they have all been tarnished with the same brush unfortunately, so they will have a very very difficult time finding a new AFSL, l I think that was asic’s message to their Reps in the way they handled dover’s closure
yes time to stick by dover. don’t worry about being licensed elsewhere just keep sticking by dover per original affinity for dealer group
there are agendas on the go here. watch for a fpa model to be announced where advisers are licenced through them to avoid a dover situation.
Unlikely and wouldn’t work from a regulatory stand point anyway as it would just be CPAAA mark II.
Dover is an example of why we need to a different operating model. advisers need to be licensed and monitored by FASEA. i can’t wait for 2019, and 2024 to come sooner
As suggested by Jane at BT? That wouldn’t work as FASEA is a standards body. Jim’s Mowing FP would be a more compelling argument.
whatever, the dealer group model is defunct
As an AR of Dover, I used to respect you Terry. I am more than disappointed by your behaviour. I should have trusted my intuition when you had the hissy fit regarding FOS and moving to the CIO that something was wrong. You demanded that we work ethically – however the gossip coming out of the woodwork appears you have not lived by your morals, including dumping Dover ARs with a 500k IP excess and not telling them… hmm…
Dover advisers have a contract. I’d imagine either party can provide 30 days notice. Dover should be venting anger at ASIC for doing this. I’d be angry that parties like CBA can get away with everything they’ve done and not be shut done just because they’ve the funds to pay off clients. I’d be venting my frustration at ASIC. Dealer groups are a dime a dozen, there are plenty that will take on advisers with a half decent compliance rating.
I suggest that anyone who wants to understand why Dover is no longer in business should read the document entitled: Dover’s Client Protection Policy.
Yet another unsubstantiated smear.
Have you even read the document you referred to? I have and it provides some very useful information for clients including their rights and responsibilities which they may otherwise have been unaware of. What in particular do you disagree with in the updated Client Information Policy?
I’m not sure if you are a troll – you are certainly not willing to put your name to your comments. I’m talking about the Document entitled the Client Protection Policy – despite its name – it was designed to limit clients’ rights in ways that were clearly contrary to to the unfair contract provision of the ASIC Act – Justice Hayne (a former High Court Judge) described it as being misleading and deceptive – I can’t take this issue any further.
I agree. I think I and most others -particularly members of the public – would much rather rely on Justice Hayne’s inference on what is and is not misleading and deceptive rather than Terry’s opinion
https://www.dover.com.au/important-notices/
Dover changed the disputed section immediately and wrote to all clients to say it was misleading and deceptive. What more could they do?
Again – as you didn’t answer, what in particular do you disagree with in the updated Client Information Policy?
Without pointing any particular fault in the document, your claims are unsubstantiated.
no point arguing, Dover is no longer in business.
unsubstantiated? Justice Hayne, a former justice at the high court of australia – the highest court in the land – said, “isn’t the whole document misleading and deceptive mr mcmaster”
think about that for a minute and tell me what more “evidence” you need
ASIC don’t just cancel licenses
You’ve got to be joking David. Hardly a reason to be shutting them down. Compare the action of Dover to the behavior of CBA FP and AMP and the hundreds of lives these firms have ruined and it’s night and day. Hopefully ASIC will now move onto closing down the AFSL of AMP and CBA ASAP. AMP and CBA have blown any chance of financial advice ever being described as a profession and as soon as these firms get out of providing advice the sooner Australians will have trust in financial advice.
David – whilst I agree that the CPP was a deceptive and misleading document my understanding after speaking with some Dover advisers was that the document was withdrawn BEFORE the RC had even begun. Not only that but Dover had apparently written to every single client that had received this document to clarify the situation. Now this was obviously a very poor attempt by Dover to try and limit any potential liability for advice provided by their ARs but surely that in itself would not warrant a withdrawal of their AFSL? Compare and contrast the behaviour of the big boys whereby you can lie and mislead ASIC multiple times, charge fees for no service, charge fees to dead people, provide dodgy advice that was detrimental to hundreds of clients….but because you have a large cheque book and can afford to keep a large team of QCs on your books……you get to keep your AFSL? Talk about one set of rules for one party and a different set of rules for everyone else.
Exactly!
Dover has been very transparent in regards to the CPP:
https://www.dover.com.au/important-notices/
sure, they are no longer in business their website will be shut down on 6 July and their AFSL cancelled.
no need to argue, it doesn’t matter. AFSL = Cancelled.