ASIC warns licensees on Dover recruits

The Australian Securities and Investments Commission (ASIC) has issued a warning to licensees in the wake of the Dover license closure that they should ensure they have robust recruitment and monitoring procedures in place.

It said this was particularly the case when “appointing advisers who have worked for a licensee with a poor compliance history”.

The regulator’s warning was directed in part towards Dover clients, noting that the advice firm had advised ASIC it would cease providing financial services.

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“As such, Dover clients might look for a new adviser,” it said. “These people should ensure the adviser is authorised by an Australian financial services (AFS) licensee. If someone wants financial advice and their ex-Dover adviser is not yet authorised by another AFS licensee, then the client should approach a new adviser.”

In guidance directly aimed at “ex-Dover advisers”, the regulator noted that “a person cannot give financial advice unless licensed or authorised by an AFS licensee”.

“ASIC understands Dover has revoked the advice authorisation of all its representatives. This means ex-Dover advisers cannot give new advice until authorised by another AFS licensee.”

Dealing with AFS licensees considering authorising ex-Dover clients, ASIC referenced its past warnings to AFS licensees “to ensure they have robust recruitment and monitoring when appointing advisers who have worked for a licensee with a poor compliance history”.

“ASIC notes any licensee considering authorising an ex-Dover adviser should:

  • do background checks before authorising the adviser. When hiring a new adviser ASIC suggests that, at a minimum, licensees receive audit reports and/or reference checks from the previous licensee. In the case of ex-Dover advisers, you should get audit reports and/or a reference from the licensee before Dover and/or do other assessments of the person's competence;
  • have arrangements to address deficiencies in the advice from ex-Dover advisers, and
  • have heightened oversight (for instance, vet all advice from ex-Dover advisers for a period).”

 




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What an appalling display of helping the public good. I am sure there are many good self-employed advisers who provide sound advice to their clients in Dover. To be told they can not provide advice to their clients before 30 June is an appalling use of power by a regulator acting in its own self-interest and not of the public. Surely good advisers should not be pulled apart by actions of Dover and ASIC with little care for small business who do act in their client best interest. 10 points for ASIC and 0 benefits for clients and self-employed advisers who are acting in their clients best interest with Dover. Clearly, ASIC has no care for the long-term trust and relationship a client builds with their adviser which to me demonstrates you are acting in their best interest over many years.

How did ASIC warn AFSL's? I asked my license, they havenot had any communication from ASIC on this matter. Or is a press release/TWITTER account now the official ASIC communication method??

How ironic that ASIC should make threats to advisers around "One size fits all" advice being reprehensible, and then apply a " one size fits all" approach to all "ex-Dover" advisers. Either the new Chairman, or the Minister needs to step in urgently and stop these bureaucratic rogues from trashing the whole industry. You have to ask yourself - what pressure was applied to McMaster that he would throw away a 400 planner Licence in one go? Why would he crystallise such a massive personal loss? And what does that mean for the banks investigating whether to sell out of the industry? What's an AFSL worth now? And in case you think think its just an AFSL issue, McMaster and ASIC have just put all 24000 financial advisers on notice that in one month, it could just as easily be them that has to cease giving their clients advice. So much for the regulators meeting their primary function of market stability. Heads need to roll.

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