Last week, ifa exclusively reported that Dover director Terry McMaster has announced Dover will close its doors and cancel its licence, leaving hundreds of financial advisers urgently seeking a new licensee.
In his letter to authorised representatives, Mr McMaster indicated that ASIC intervention was the primary reason for the shutdown and “short notice”, and said “ASIC are watching the way that we wind the AFSL down very closely”.
An ASIC spokesperson has now issued a short statement to ifa clarifying its position and seemingly suggesting that the ultimate decision to close shop was Mr McMaster’s.
“As part of an ongoing investigation commenced in 2017, ASIC served a notice of hearing on Dover that ASIC was minded to suspend or cancel Dover’s AFSL,” the statement said.
“As a result of this notice, Dover [and] Mr McMaster have advised that, amongst other things, Dover will cease providing financial services.
“At this stage ASIC does not intend to comment further. ASIC’s investigation is continuing.”
Do you know more about this? aleks.vickovich@momentummedia.com.au
Dealergroups have the massive conflict of needing to keep the advisers generating revenue while also ‘auditing’ them… Audit process turns out to just be covering up the tracks of various issues.
For instance, once dealergroup who will remain nameless, found that some of their advisers didnt provide SOAs or speak to clients when switching investment options coming up to ‘MySuper’ date.. They just went and did it so ‘advice’ fees could be maintained although they dont actually speak to these clients… No surprise, the dealergroup did nothing about it so they could keep getting paid, nor did ASIC.
For the record, the dealergroup I am talking about was not Dover.
I actually heard decent things about Dover compared to other groups.
good job ASIC. we need to lock out Dover advisers and also the management team to ensure they are never employed in this industry. LOCKOUT NOW!
what a crock of shit. Like any AFSL there will be plenty of really good operators in the Dover ranks and there will be some who shouldnt be in the industry. I know a few guys licensed thru Dover and they’d be an asset to any AFSL
If you want to hide get your own AFSL . Dover had a responsibility it failed to meet , and that was follow the guidelines clearly spelt out by the regulator . The hidden risk for the industry is not AMP or CBA they are on notice, and will spend heavy to implement change , the biggest risk is the sole operator who gets a license and goes almost free of any surveillance . AFSL numbers should be limited to 200 , and all AFSL need to have separate and dedicated compliance, educational , business development staff to support advisers and ensure the regulators requirements are met. Advisers who are the AFSL like Sam Henderson are able to do what they like when they like and only get caught when a client complains (even then nothing happens as was the case with him ) or there is a royal commission. If you are a bad egg and come from Dover , apply for your won license . if you are a quality adviser seek out a quality AFSL that can offer you services to improve your business.
While a strong AFSL can help to stay ahead of ASIC’s evolving requirements on compliance related matters, it’s not enough.
Too many ‘quality’ AFSLs bundle their services and seeks to take a ‘split’ from whatever revenue the advisory firm makes. They construct their services to the lowest common denominator, create further ‘splits’ that are product related, and then construct their ‘research’ model so that advisers (and their clients) are forced to an unhealthy dependency on these ‘licensee-split’ products. Don’t ask too many questions. So much then for trusting the ‘quality’ AFSL as a source of truth.
The aforementioned issues then, are also contributing to the rising demand in own AFSLs.
the rise of very good quality advisers who are highly educated and compliant seeking their own AFSL is not just a trend it will increasingly be the norm as we seek to depart from the restrictions that you have mentioned. I am looking to do just that and am preparing to apply for my own AFSL
there will always be a few sam henderson but for the most part advisers seeking their own AFSL is because they want to be independent of any influence from product and that is better for the client
What a load of Rubbish. Spoken like a fat old dinosaur of a dealer group head, worried about their grandfathered commission and grandfathered volume bonuses in return for the PD day consisting of a product provider. Trying to scare a few advisers about the “heavy workload” not going to work. Having my own AFSL my compliance support has trippled compared to the large bank owned AFSL and another AFSL with 300 advisers in it, that I was with. My compliance has never been higher being self licensed. It’s impossible to hide out as you describe. I concur that self licensing is the future.
dealer groups have a vested interest. there are a few good ones, i am with one in top tier. they do offer a lot of support yet i am still going to be self licensed for the very same reasons you mentioned.
advisers need to be responsible for their own destiny and not entrust it to dealer groups who for the most part – as demonstrated by dover – are not interested in either the adviser or more sadly the client
advisers, get your masters degree, pass the exam in 2019 – i know you don’t need to. get compliance, research and software support and get self licensed. that is the future.
we left dover four months ago due to their inability to act correctly. So Jimmy, we have already checked ourselves, and yes a class action is on the boards……
class action is the way to go. Dover AR’s please proceed with the class action
Yes class action, please commence so we can join
Be careful what you wish for. A class action would end up expensive, and may not result in a satisfactory outcome.
class action anybody?? charging for a substandard service, non disclosure to advisers, and now leaving advisers high and dry !! This has to be a class action…….
How much do you reckon could be gained through such an action, after allowing for costs? You need to check yourself mate if this is really your best idea in this circumstance.
If ASIC will not provide full and open disclosure of the issues under investigation and/or the concerns involved, how is any other licencee to learn or gain from this effective closure of a business by ASIC, albeit indirectly. “Kaffka’s Trial” is alive and well in our industry.
I think you mean ongoing fees, Steven. Fee for service is just being paid for he services a financial adviser delivers.
I’d guess you’re talking from ignorance and inexperience…Do you have an AFSL? How long have you been in this industry and if it’s along time and you don’t have an AFSL then you lack credibility. I do have one and I am totally fee for service and my client get invoiced each year and THEY choose from a menu of fees and services – a bit like in a restaurant – and they only pay (for the year ahead) if they wish to continue… If you don’t think that’s both fair and transparent, as well as consumer-friendly AND best practice, tell us what YOU do and how and we’ll see what we think. Have some confidence in our own position. And use your name, “Steven”!
Just because you don’t have your own AFSL doesn’t equate to lack of credibility. Very narrow minded. A good dealer group can remove a lot of tasks that don’t add value to advice firms or their clients from advisers/ business owners.
What like. Providing an economic update as at 6 months ago as a PD day? Coming along and auditing the same files three years in a row? I struggled to find any value in that relationship, and that was my experience as an adviser for 20 years in 3 AFSL’s so I set up my own AFSL last year. Sorry to offend but with large dealer groups the compliance standards are just too poor for me, and are just full of the dregs of the advice world. Advisers hanging out for that BOLR or retirement.
YOU are 100% correct. hence why after 18 years i too am getting self licensed. for highly qualified and competent advisers it is a risk being in a dealer group look at what happened to Dover advisers
sadly many will probably not find another licensee and may have to go bankrupt
Well ASIC, it is time for you to wake up, stop cherry picking the easy jobs and acting only when a whistle blower complains or a bad Apple goes wild and start INVESTIGATING every single dealer group and questioning their advisers on why every client is on a fee for service regime which is code for annual commission.
Most mums and dads do not need nor deserve this absolute rort that lines the pockets of advisers invested in a business that isn’t viable without these clueless clients who get hoodwinked and fooled into signing the service agreements.
90% of client scout there do not need fee for service annual charges. It is not needed. Any adviser that cares to debate this confidently, put your name and practice address below and allow ASIC to audit your reasonings. You will lose. You can’t defend it.
Mate you are getting old with this. I have clients on an ongoing fee and make sure they meet all caps maximise their contributions and a million other things. My fees are reasonable and if you ask my clients they would not turn off the services.
You do know people can pay for a device they want to don’t you ???
Steven, different comment so well done for not cutting and pasting. I still think the best approach is for you to put your contact details on the comments so people can ring you and debate this with you. Personally I’m not in the practice of giving out my phone number to keyboard warriors.
Really Steven? Sounds to me like you are emotive whilst writing your diatribe. Perhaps you should take a few moments to calm down.
Philip Carman’s post on “annual” fees – not “ongoing” – is a proxy for professional invoicing. That is quite apart from the ongoing relationship all good advisers must have with their clients.
The challenge is for advisers to separate their necessarily proactive & ongoing client relationships from the traditional opaque, ongoing fee structure charged by so many for so long.
Recently took a client off an ongoing service fee arrangement, at my instigation, because it’s not appropriate for them. They will now be fee for service when required.
Just met with another client, who IS on an ongoing fee service, who WANTS this type of service. One of their friends tried to self manage, did not want to pay for advice, and has apparently made a mess of it. Stress for husband and wife in retirement.
Horses for courses. It can be about keeping people on track – when it comes to finances, people can be their own worst enemies. Retirement is a long time.