The Commonwealth Bank’s product manufacturing subsidiaries have suspended payments and withdrawn authority for authorised representatives of soon-to-be-defunct licensee Dover.
On Friday, 8 June, ifa exclusively reported that Dover Financial Advisers will be closing down, leaving almost 400 authorised representatives seeking alternative licensing arrangements before 6 July.
ifa can now reveal that the Commonwealth Bank has taken action regarding Dover advisers that recommend products offered by its CommSec Adviser Services and Colonial First State businesses.
In a communication to clients of Dover authorised representatives, obtained by ifa, CommSec Adviser Services announced that their adviser’s authority will be removed.
“Following the recent announcement regarding Dover Financial Advisers Pty Ltd (Dover) … ceasing to provide financial services, we will no longer accept instructions on your behalf from anyone employed or previously employed by Dover,” the communication states.
“Effective immediately: we will be removing your adviser's authority to transact and/or trade on your account/s; [and] instructions received such as transactions and/or trades, will only be actioned if they have been authorised by you (the account holder/s).”
CBA subsidiary Colonial First State has also taken decisive action.
An email from a senior member of CFS’s dealer and adviser operations team to authorised representatives last week, seen by ifa, confirms that existing fees and commissions owed to Dover advisers and clients will be suspended.
One Dover adviser, speaking to ifa on condition of anonymity, said he was “disgusted” by the action taken by the bank in regard to suspending access.
“None of my clients have withdrawn my service agreement with CFS and I believe that any ongoing advice which has been previously approved through the Dover compliance process can still be provided,” the adviser said.
“In the absence of a specific banning order from ASIC I do not believe I am breaking the law.”
A CBA spokesperson did not confirm or deny the evidence in the communications, offering a broad statement on the matter.
“We acknowledge this is a difficult time for advisers, and are working through what this situation means,” the spokesperson said.
“Like all providers, we need to consider both advisers and clients’ best interests.”
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