Non-institutionally aligned dealer groups are likely to suffer a dip in confidence in the wake of the “chaotic” closure of Dover Financial, according to Lifespan.
Speaking to ifa, Lifespan chief executive Eugene Ardino said that while the cause of Dover’s abrupt closure last Friday appears to be “related to activity at the licensee level” rather than at an adviser level, public confidence in non-institutional dealer groups will likely be damaged.
“It’s chaotic at the moment in the industry; my biggest concern is that it dents confidence in our sector, that being the privately-owned sector,” Mr Ardino said.
“However, I think it’s important to note that Dover’s only one organisation; there are lots and lots of dealer groups out there that are non-bank or non-insto and many of them don’t have any issues.”
Mr Ardino added that non-compliant behaviour is typically a rarity for non-bank and non-institutional licensees due to the difficulties businesses of that size would face in continuing to operate.
“When there is an issue in our sector of the market, it gets sorted. ASIC steps in and intervenes or capitalism sorts it out because they get claims and it puts them out of business,” he said.
“There’s pros and cons to that, but it does get resolved – you don’t end up in those circumstances where you have advice businesses that have problems that go through enforcement activity after enforcement activity and don’t improve, it does get sorted out.”
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