EXCLUSIVE: Collapsed licensee Dover Financial is suing a number of former authorised representatives (ARs) for breach of contract stemming from deferred licence fee arrangements.
ifa understands that a significant number of former Dover ARs have received debt complaints and the associated legal documents to appear in the Magistrates Court of Moorabbin in a case related to deferred licence fee arrangements, which allowed new Dover advisers to push back a $20,000 fee by up to a year from their start date (the ‘Dover 360’).
When Dover collapsed, the debts were called in – a move which some former ARs are unhappy about due to lack of notice around the company’s difficulties with ASIC. The request to appear in Victorian court is also seen by some as an attempt to stymie their defence.
“Given the COVID-19 pandemic and Victorian lockdown and quarantine, this is clearly a strategy to make it as difficult as possible to respond, appear, consult with lawyers, and defend oneself, especially from interstate,” a former AR, who wishes to remain anonymous, told ifa.
ifa has seen one set of documents showing that Dover Financial Advisers is suing a former AR of Dover for breach of contract in the Magistrates Court of Moorabbin, with its lawyer listed as TMC Legal. Another former Dover AR confirmed the debt complaints were issued from August onwards.
Dover founder Terry McMaster signalled his intention to collect the outstanding fees in the aftermath of the company’s collapse. At the time, Adviser Ratings estimated that as many as 150 individuals could owe as much as $2.5 million to Dover.
Dover was one of the largest scalps taken in the royal commission – but many former authorised representatives believe the licensee was targeted unfairly due to its primacy within the advice space and a small handful of ‘bad apple’ advisers.
Terry McMaster confirmed the proceedings but declined to comment for professional reasons.
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