The independent and non-bank financial advice community is opening doors for former Dover authorised representatives, despite the regulator’s steely gaze on their movements.
On a sweaty, humid morning in Havana, Cuba, this week, members of the AIOFP held a special executive meeting during their 20th anniversary conference to discuss an important item of business: the fate of Dover’s almost-400 authorised representatives.
Since ifa’s exclusive publication of a letter from Dover director Terry McMaster to his advisers announcing a shock closure of the business following an ASIC “negotiation” and “agreement” on Friday, 8 June, hundreds of SME financial advice practices aligned to Dover have been desperately trying to find alternative licensing arrangements in order to continue trading.
The AIOFP members present - which included a number of non-institutional AFSL holders ranging from sole operators to large dealer group networks - expressed clear compassion for their Dover-aligned peers.
“It’s just wrong,” said a fired up AIOFP executive director Peter Johnston, referring to the short notice provided to Dover authorised representatives and their alleged treatment by the corporate regulator.
Mr Johnston revealed that in the immediate aftermath of the announcement, he was able to canvass support among AIOFP members, with “seven large licensees and 15 smaller licensees putting up their hands” to take on Dover advisers.
He said the movement of Dover advisers to new AFSLs in a timely fashion is the “most important” issue they must resolve in the short term, beyond other long-term legal or commercial considerations.
Several of the licensees present at the meeting explained that they are in various stages of discussion or on-boarding of Dover advisers.
Other licensees such as Shartru Wealth and Bluewater Advisers have also publicly come forward on social media to express their regret for the Dover situation and invite Dover advisers to join their ranks.
The openness confirms comments by a Dover adviser to ifa that licensees have been unexpectedly forthcoming “contrary” to their “initial fears”, such as the blanket invitation issued by Aon Hewitt.
It also comes as ASIC has demonstrated some hostility to the Dover network in the wake of the shock announcement.
The corporate regulator issued a statement on Tuesday, 12 June recommending that clients of Dover strongly consider moving their business to a third-party not associated with the licensee, in a move likely to exacerbate stress for the Dover community.
In his explosive letter to authorised representatives, Mr McMaster indicated that ASIC will be watching the wind down of the licence “closely”.
Moreover, Mr Johnston referred to “rumours” that ASIC has informed licensees taking on Dover advisers that they will face additional supervision and monitoring.
While the overall tone was one of sympathy and support for the Dover authorised representatives, one of the AIOFP members present - a senior executive at a large non-bank licensee speaking under Chatham House rules - offered a more practical assessment of the situation.
“We will take some [Dover advisers] on, but we will assess them individually on a case-by-case basis,” he said.
“I acknowledge we can sometimes be too conservative but we have a moral obligation to vet them appropriately.
“Some will struggle to find a new licence. We have knocked back a number already. Some may lose their practices.”
Beyond the IFA movement, the XY Adviser network has also established a number of resources for the Dover advisers, alongside internal efforts established by the Dover community itself.
ASIC has confirmed that it has been investigating Dover since 2017, but has remained silent on the reasons for the investigation.
An ASIC spokesperson has confirmed to ifa that ultimate responsibility for closing the licensee was the decision of Mr McMaster and Dover leadership.
Mr McMaster has declined requests for interview.
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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