A document ASIC sent to Dover days before the shock closure was announced on 8 June this year, seen by ifa, shows the regulator wanted Dover to close down as soon as possible as part of an enforceable undertaking.
The document specified that Mr McMaster withdraw the authority of Dover’s representatives by 8 June 2018, and terminate their appointments and cancel the AFSL by 6 July 2018, which aligns with the dates provided to Dover advisers in Mr McMaster’s email informing them of the closure.
ASIC also said it would not alter this time frame without evidence that it would impose specific risks on clients of the authorised representatives adding that under section 915H of the Corporations Act, the regulator likely has the power to close the business itself.
A spokesperson for the corporate regulator previously confirmed it intended to cancel Dover’s licence but would not confirm a time frame and told ifa the decision to shutter the business ultimately came from Mr McMaster himself.
A statement issued by ASIC on 29 June 2018 in relation to the closure of Dover explained that the enforceable undertaking had resulted from an investigation into Dover’s client protection policy, which was also questioned at the royal commission when Mr McMaster collapsed in the witness box.
The statement said Dover received notice from ASIC on 18 May 2018 that the regulator had “significant” concerns with the client protection policy and would conduct an administrative hearing into the business’ ongoing ability to run a financial services firm.
“Subsequently, ASIC and Dover engaged in discussions in relation to ASIC’s concerns. Dover informed ASIC it would cease operating its financial services business under a timetable to be negotiated with ASIC,” the statement said.
“Dover also informed ASIC that it would be notifying its authorised representatives on 8 June 2018 that it intended to request ASIC to cancel Dover’s licence and that they could no longer provide financial advice as a representative of Dover from 8 June 2018.”
Jerry Come back !
ASIC are nothing but a bunch of lying, sanctimonious, two-faced pricks. A comment I made a week ago but deemed too offensive by the moderator. Well Mr Moderator, it is not your income, your livelihood, your mental health that has been affected. So grow some and print this.
Just calm down Terry. My advise would be take a holiday and relax, while you still have some money. Soon it will be gobbled up by the courts.
they are gonna rip him to shreds
The excess for a Dover adviser for a PI claim was $500,000. It was well and truly over.
can you please explain the significance of your statement, and the implications for both an adviser and the client
a lot of people do not seem to understand this nor want to get it
I think it means that if you had a PI claim as an AR at Dover then the you as the AR/advisor had to pay the first $500,000…
which most of them might not have had to be able to pay, then what happens ?
Well that’s the whole point? ASIC would realise this would kill any normal adviser, but lots may have half a mill in assets/equity. If the adviser was smart enough to not have anything in their name to go for then where would this leave the client? I think Terry was even thinking about trying to up this to a $1 Mill excess. Maybe due to the enormous cost of PI. Nothing was transparent, we will never know.
I believe they negotiated the $500,000 excess for a lower premium.
Dover only allowed advisers to implement very conservative SOAs. Nothing risky was allowed, plus everything had to be checked by qualified legal staff before it was allowed to be sent to clients.
I guess they worked out that with all the checks and balances in place, combined with very conservative advice, a large claim was not likely.
Please correct me if I’m wrong…..
Claims are made against the AFSL, not the adviser. Dover had to pay the excess, not the adviser. Same as with any AFSL.
Not true, my current AFSL requires advisers pay the excess. We have a General Indemnity clause in our contract which basically indemnifies the AFSL from any claim, which I was explained, mean that we need to pay for excess for any claim.
Yep, in the event of a claim you go for everyone. The licensee, the adviser, the firm….everyone. (except the Accountant because they do nothing wrong and the product manufacturer because they are sacred) It’s industry standard for the authorized reps/adviser to pay the excess with employees/representatives having it paid by their employer. Yet another reason dealer groups are dinosaurs.
Doesn’t that mean the AFSL is still liable for the excess, but they rely on their contract with the adviser to claw it back?
That is a matter for you and the AFSL. But the client makes the claim against the AFSL. And the AFSL has to pay the claim to the client.
If you have made a separate agreement with your AFSL to indemnify them for any such claims, then that is a separate matter between you and the AFSL. But if, for example, you cannot pay the claim to the AFSL, then the dispute is between you and your AFSL, not you and the client. The client will have been paid by the AFSL. The terms of your agreement with the AFSL do not affect the client’s rights against the AFSL.
is this why Terry Fainted at the royal commission ?
Dover advisers still have more insurance cover than any other advisers. Let me explain.
Dover had independent solicitors review each SOA. One advantage of this was bringing their solicitors’ professional indemnity insurance into play. This policy has no upper limit, indefinite run off cover and no excess.
This means Dover advisers have vastly superior PI cover compared to other AFSLs, including yours. If in say, 2021, a Dover adviser is found by the CIO (or its replacement) to have provided advice not in the client’s best interests the Dover adviser will have the benefit of that policy.
You should ask your AFSL if it has run off cover like this. Its answer will be no, it does not. This means if you report a claim one day after the policy ends you are not covered. Good luck mate. I hope you don’t own any significant assets, because if you do they are at risk.
To be frank, and now I can be, the PI insurance held by most AFSLs is rubbish. Please don’t think the insurers pay up happily. They don’t. They fight every claim every step of the way. And if a claim does have to be paid you can be sure next year the premiums will go up by more, or the insurer will not renew. Either way the AFSL loses.
Let me know if you want me to expand on why AFSL insurance policies are not worth the paper they are written on. Send me an e-mail and I will send you lock, stock and barrel on this topic.
For completeness, RG 126 stresses the importance of an AFSL’s financial resources and its compliance processes when assessing the adequacy of an AFSL’s compensation arrangements. So there is a lot more to it than insurances. Its actually all about compliance systems. Dover had an EDR complaint rate about 10% of the industry average. Financial resources are important too. Dover had an extremely strong balance sheet with over $6m of debtors, virtually no debt, very strong cash flow and was very profitable. As far as I can tell financially Dover was well ahead of its competitors.
So, in summary, Dover advisers still have the benefit of well resourced AFSL, with significant assets, good compliance processes, very few complaints and, indirectly, an insurance policy with no limit, no excess and indefinite run off cover.
And you don’t.
Hi what’s your email address please? Yes I would like to know more.
My new AFSL isn’t in Dover’s league. I was never prejudiced by the minor defect in Dover’s policy. Correct me if I’m wrong, but to my knowledge nor was anybody else.
I’m convinced this was a bit of a setup. ASIC must’ve had it in for terry mcmaster after making them look like idiots so often…. it just reeks of something more than what ASIC are letting on.
hopefully, your strong balance sheet with $6m tangible assets will be able to cover all damages claim by ex Dover advisers currently pending
criminal charges against dover and terry mcmaster now!!!!!
criminal charges now!!!
You can be frank now because you’ve been exposed as a crook. I think 90% of these comment are from Terry and his few friends
Bring Dover Back
isn’t there a class action that has commenced against dover brought on by ex-dover advisers? the ex-dover advisers seem to think they have been wronged by dover though. Terry is saying it’s ASIC’s fault hmmm smells
I didn’t know much about Dover until recently. And had one very successful dealer group head state, “we are at the top of the “independents” and Dover at the bottom”. his sentiment was broadly accepted in the industry. how come Dover were thought of so poorly? and suffered ill repute?
some of their ex- advisers seem to be mad raving fans though. was it just tall poppy syndrome?
No
Terry thinks everyone is jealous of him. correction, everyone thinks Terry is stupid. like the reps who he authorised, who couldn’t afford to pay $25k pa (I spend twice more on client entertainment each year than that ) and then sued him so they dont’ have to pay, when he got shut down by ASIC.
terry =0 + the retard reps he stupidly authorised = -1,000,000,000,000
the loser tards who can’t afford to pay $25k pa are going to sue the tard who authorised them, and imagine the loser lawyers who are taking up this case ha ha
ha, loserville, the lot of you need to go to Bunnings, buy a shovel, and start digging a hole in the ground (and no, not to find gold and or ship iron ore to china) no turds, it’s to dig a big enough hole to jump in and bury yourselves
LOSER’s, hungry jack cashiers you are (yoda)
Can someone please explain to me exactly what the issue was in their client protection policy – as it must have been pretty severe to be the reason for the shutdown???
As far as I know, Dover was the only AFSL in Australia which insisted that every SOA produced by advisers had to be signed off by qualified legal staff before being sent to clients. This compliance system didn’t come cheap because Dover had to employ 20+ full time staff to check the SOAs. Submitting the SOA to Dover was mandatory and if the adviser failed to do this, then their authority was terminated. Dover’s mantra was that all advice ‘had to be compliant and in the clients best interest’.
I believe the client protection policy addressed the fact that the SOA had to be checked by Dover before it could be sent to the client. If the adviser failed to submit the SOA to Dover, then they may not be covered by Dover’s PI insurance. In effect, the CPP was used as leverage to ensure advisers submitted their SOAs to Dover first. If the adviser followed procedure, then they would be fully covered if anything went wrong.
As Terry stated at the Royal Commission, the clauses in the client protection policy were never ‘relied upon or never used’. They were simply there to ensure the adviser followed procedure by submitting their SOAs to Dover first.
Another thing, no one lost money because of anything in the client protection policy…. Dover never even received any complaints. Compare that to the millions of losses suffered by the bank owned AFSLs.
Shutting down Dover was a disgrace and an abuse of power. Seriously, this is a huge story….. Finally, questions are starting to be asked….
yes, they had; Herbert Smith Freehills (previously Freehills), Allens Linklaters (previously Allens), King & Wood Mallesons (previously Mallesons Stephen Jaques) review each and every SoA to ensure they were fully compliant and in the best interest of the client.
don’t think anybody got your joke
Thanks for that – but I think I am still missing something. Why would ASIC want to shut them down for having that policy? The policy might have been designed to cover Dover’s liability on the advice – but how would checking the content be a bad thing for the client?
Probably something to do with ASIC bonus scheme
Because of the risk of the adviser not submitting SOA to be checked. The adviser would not have the resources to compensate the client, and therefore the client would be at risk. There were instances where the adviser would present the SOA to the client prior to it being checked by Dover.
Come on IFA, there is a big story here. Why does Dover get shut down when no clients suffered any financial loss? Clients of the big banks have lost 100s of millions because of poor advice. Gee I wish I was a journo, I’d be all over this. Get that Walkley Award ready….
Terry you can’t hide
So, ASIC shut down Dover, and then gave the public the impression it did not…
Not a good time to be a non-institutionally owned AFSL. The precedent is set.
Which AFSL will be next?
Kell swore he’d shut Dover down which was purely due to Dover absorbing too many of the banks/AMP’s clients. Dover did this simply by being honest and more competent. Peter Kell has them in his back pocket. How are those fees for no service going? RIGGED WITCH HUNT.
ASIC is pretty much set on killing independent advice in Australia. 1) Removes Dover’s license and 300 + planners out of business. 2) Ban on the use of the words “non institutionally owned” 3) Defines Centrelink Pension loan scheme as a credit product therefore ruling out advice by planners 4) Banks never pay $1 in fines or suspended for a minutes 5) ASIC makes changes to disclosure laws allowing AMP advisers to place a small logo on page 400 of webpage. 6) I could go on and on around FoFa, licensing exemptions for super funds etc
[quote=Jerry Come back pls]we need Dover back asap. Terry Come back all your ex-advisers will be back to you asap
please for God sake come back [/quote]
Ummm…could that be Terry?
Terry would prob get his name right lol 🙂
jerry barry terry merry, all the same who cares. dover has closed it’s doors. they ain’t coming back. ever!
Gud obzavati0n
To see the double standards at play here look no further than ASIC’s Tim Mullaly’s evidence at the Royal Commission.
Tim Mullaly handled the bank tellers giving financial advice rort.
From 2014 on thousands of commission driven bank tellers pretended they were financial planners, in flagrant breach of the Corporations Act, to flog what the banks admitted were under-performing super products. Literally hundreds of millions of dollars of unearned fees and lost earnings on investments.
Mullaly told the Royal Commission ASIC did not want penalties (amazing!) and did not want remediation (even more amazing!!). They just wanted the banks to stop doing breaking the law. It took four years before the banks stopped breaking the law, signed their own EUs promising to no break the law any more. But even then the banks gave themselves an extra 45 days to “change their systems”. And Mullaly agreed to that to. I kid you not.
This is what you get when the banks pay $120,000,000 a year to ASIC. Vertical integration: the banks own ASIC.
Of course, 120 bank ARs leaving the banks to join Dover has nothing to do with ASIC closing Dover.
ASIC does not work like that.
Drop the mic!
we need Dover back asap. Terry Come back all your ex-advisers will be back to you asap
please for God sake come back
ASIC shut down Dover on a couple of contentious clauses in their client protection policy. ASIC were sitting on Dover’s client protection policy for 18 months and didn’t raise any concerns until the Royal Commission came along. What a set up….! ASIC have a lot of questions to answer here…..
Surely this problem can all be solved if ASIC simply pass an Ethic’s exam and get a degree.
The Canberra Times said Dover asked to be given until the end of the year but ASIC said no. So advisers spent June scurrying for a new AFSL when they could of been helping clients. Thanks ASIC.
National Australia Bank clocked up 111 breach reports in three years, each one of them out of time.
Looking forward to seeing ASIC shut NAB down…
Lol mate dont forget CBA… And AMP literally lying to ASIC through a doctored report…
Dover is such a small fish in comparison yet gets this treatment… Talk about the banks being a protected species. Them doing the wrong thing is a calculated risk as they know if they get caught they just pay a fine and move on.
What a despicable act. How can ASIC ask for more powers when they act in such a callous manner. One can only assume the direction they provided to McMaster was deliberately designed to destroy financial planning businesses. There is a shocking culture in that organisation. I hope the royal Commission turns their focus on that organisation because they have serious questions to answer.
Absolutely disgraceful. Yet CBA & AMP etc etc have not even been shut down for five minutes..or even pay $1 in fines.
a convenient scalp (scapegoat) to distract everyone from the incompetence of ASIC. also convenient to cancel Dover’s license before the RC findings could even be released, just in case Justice Hayne in fact found that McMaster wasn’t of ‘poor fame and character’ as claimed by ASIC as part of the RC.
So ASIC shut down Dover for their client protection policy which did not cause any damage to any client, yet ASIC happily lets the big banks who have caused millions of dollars of damage to clients keep their licensed and operate. What a wonderful world to be living in!
Correct! ASIC had a copy of the client protection for 18 months, but raised no issues with it. Dover invited ASIC down for a voluntary audit in October 2016. Despite several requests, they never received an interim report…. no issues were raised. As you said, no one lost money because of the client protection policy. How much money did AMP lose for clients? A few hundred million….? AMP still have their AFSL. The system is corrupt.
yes it is. yet, no one seems to think we need to overhaul the entire AFSL system. it does not work. Advisers need to be self licensed. until then things will continue on, and get worse, hard to imagine it can get worse than now, but it will
And yet no significant concerns over the conduct of the big guys ……..
What did they have to gain by lying? Why kind of regulator have we got who is more interested in prosecuting the law over the impact felt and suffered by the Advisers and god forbid the clients who are in one foul swoop orphaned? How hypocritical when all they espouse to Licensee’s is the need to be honest and transparent…Advisers are expected to people of high ethical and moral character…way to do as we say and not as we do ASIC!
That ASIC can of worms is about to be cracked open.
ASIC should set up there own Financial planning company given that they have all the answers. what a joke. put the public service on performance mangement see how long those fools last.
So the corporate regulator is found to be publicly making false and misleading statements. Who do they now need to answer to? We know if this was an Adviser the regulator would be coming down on them like wrecking ball. So who regulates the regulator??
asic go after the small players who are not prepared to fight as the legal costs drain them, they eventually then give in and look to have done the wrong thing, when merely they just are unable to keep fighting. just my opinion of cos.
Class Action against ASIC???
Only Spike Milligan could write this ASIC script. Nominations are now open for who gets the roles of the blustering coward Major Dennis ( “no more curry for me” ) Bloodnok, or the devious aristocratic conman Hercules Grytpype-Thynne. The Goon Show is back !
So instead of working on a viable compensation scheme for the industry, ASIC takes to the quick and easy approach. We can argue for independent advice as much as we want, but it won’t happen until the small matter of client compensation is sorted. In the meantime I expect to see more non-aligned firms fall over or close up shop. I remember my old dealer group trying to squeeze in a $100K excess clause without their advisers knowing. They don’t like to show you the PI policy. It’s to cover them, not you.
And still no Minister for Financial Services, 4 days later
Just to keep standards as high as they ever were maybe Russell Coight?
I’m not surprised really, I have come to expect this – but I beg the question Who regulates the regulator? The Gov’t can’t as it’s clueless – so the image of a canoe without a paddle next to Niagara Falls comes to mind!
bring on the QC’s….its court time. SACK ASIC….
bloody disgusting….shafted 400 advisers …and not the banks…big end of town syndrome
Aluta continua. If True – only one outcome – Shipton SHOULD go. Harvard, Goldman Sachs mmmmm??
ASIC will need their spin doctors to turn this around. No wonder they were so quiet when usually they shout from the tallest building when they swat a fly. Time to go. ASIC cant be trusted to oversee things fairly.
Haha wow. The amount of abuse this bloke copped following ASIC saying they didnt do this.
What a great regulator, very ethical.
So when are ASIC going to publicly apologise for complete and utter lies !!!!!!!!!!!!
ASIC – hang your head in shame and the person responsible for the complete lies needs to be fired today.
What a sad joke ASIC are.
Here is a question for Justice Hayne. What can he do about the duplicity, deviousness and downright dishonesty of the management of ASIC, and their complete favouritism towards the big end of town. How can ASIC be made to do their job transparently and fairly
You’re kidding yourself. Hayne is either useless or corrupt or in on it, did you see the way the RC let ISA funds unscathed despite the shit they produce and create and advise at every level? The RC also went light on ASIC, particularly on that area of not investigating EVER such a large part of Oz retirement wealth.
Cue the music………