The Australian Securities and Investments Commission (ASIC) said it has commenced civil penalty action in the Federal Court of Australia against Dover Financial Advisers Pty Ltd and its sole director, Terry McMaster.
The regulator has alleged that Dover misled and deceived clients from September 2015, when it started using its “Client Protection Policy”, to March 2018 when Dover withdrew the policy in response to concerns raised by ASIC.
ASIC alleged the policy: contained false and misleading representations as to the rights and protections available to clients; created a significant imbalance in Dover’s and its authorised representatives’ rights and obligations compared to those of clients; and sought to protect the interests of Dover and its authorised representatives by avoiding liability to clients for poor financial advice.
ASIC alleged that McMaster was “knowingly concerned in that conduct”.
He was named as the key person on Dover’s Australian Financial Services licence, was its sole director and the only responsible manager during the relevant period, the regulator said.
ASIC said it is seeking declarations that Dover and Mr McMaster contravened the financial services law, as well as pecuniary penalties against both for those contraventions.
The civil proceeding continues ASIC’s enforcement action in relation to Dover’s protection policy, which to date has resulted in the cancellation of Dover’s AFS licence and McMaster’s permanent exit from the financial services industry.
The policy purported to be “designed to ensure that every Dover client get the best possible advice and the maximum protection available under the law”. However, ASIC argued that it was designed to burden clients with the potential liability for losses resulting from advice that was negligent, inappropriate or not in a client’s best interests.
This is inconsistent with or voided by the financial services law in the Corporations Act, ASIC said.