Dover financial advisers will cease to have any license coverage whatsoever from Friday this week when the dealer group will formally cease operating as a financial services business and the Australian Securities and Investments Commission will start the process to cancel the Australian Financial Services License (AFSL).
Any lingering hope the planners had of being able proceed with clients ended on Friday when ASIC confirmed that the head of Dover, Terry McMaster, would be removing himself permanently from the financial services industry as part of a Court Enforceable Undertaking.
In outlining the reasons for the Court Enforceable Undertaking, the regulator effectively removed a number of unknowns which had added to the confusion of Dover advisers who found themselves left in limbo for weeks after McMaster opted to cease operating the dealer group. It appears that McMaster opted to act ahead of the formal move by ASIC announced on Friday.
The regulator said the Court Enforceable Undertaking resulted from an ASIC investigation commenced in 2017, which included consideration of Dover’s “Client Protection Policy”.
It said ASIC was concerned that by intending to rely upon the Protection Policy Dover had failed deliberately and systematically for over two years to:
• comply with its obligations to act efficiently, honestly and fairly;
• comply with financial services laws; and
• take reasonable steps to ensure that its representatives comply with the financial services laws.
ASIC considered certain terms of the Protection Policy to be detrimental to clients and unfair under section 12BG of the ASIC Act because the terms:
• created a significant imbalance in the rights and obligations of the adviser and their client; and
• were directed to protecting the interests of Dover and its authorised representatives in avoiding liability to a client for bad advice, and that these terms conflicted with the obligations of an AFSL holder under the financial services law regarding client complaints and claims.
The announcement said ASIC was also concerned that Dover lacked the organisational competency required of an AFSL holder.
Due to his significant involvement in this conduct, ASIC was concerned that McMaster, in his individual capacity and in his capacity as a responsible officer of Dover:
• is not of good fame and character;
• impaired Dover’s ability to provide the Financial Services covered by the AFSL; and
• is likely to contravene a Financial Services Law in the future.
ASIC’s investigation into Dover is continuing.
