Everyone seems to have forgotten that Dover’s former advisers are small business owners who have staff, families and financial commitments to meet, according to specialist financial planning business broker, Paul Tynan.
In an analysis of the situation in which former Dover advisers now find themselves, Tynan pointed out that in most instance their advisory practices represented a lifetime of effort with the ultimate exit and succession objective being sale of the business to fund their retirement aspirations.
“Through no fault of their own, Dover’s former advisers find themselves currently not receiving any income with financial obligations to meet, whilst juggling the dual challenges of finding a new AFSL and then having to negotiate with product providers to release their revenue entitlements,” he said.
Tynan pointed to the depth of the invidious situation former Dover advisers found themselves in when he said some manufacturers had affirmed they had no intention of passing on any revenue at this time, the Australian Securities and Investments Commission (ASIC) had cautioned licensees to do full due-diligence on Dover advisers and businesses, while some institutional planning groups had signalled their intention of steering clear of ex-Dover businesses.
“What did Dover advisers do wrong that warrants this appalling retribution when they are forced to work within a licensing framework that is biased against both the adviser and their clients,” he said. “The current scenario is the perfect nightmare for our advice industry.”
Tynan said Dover was not a one-off event and that this year he had counselled a number of advisers who had lost their businesses due to the actions of their licensees.
“On one occasion, an adviser had self-reported to his licensee about an internal process issue, who in turn revoked his license resulting in the loss of his business and a million dollars of recurring income,” he said.
“If consumer confidence is to be restored, the entire advice community together with ASIC must work together to support and transition the 400 ex-Dover advisers to new AFSLs,” Tynan said
“The silence from our captains of industry has been deafening and highlights the silo mentality that exists within the sector,” he said. “But the most damning outcome of this fortress mentality by the industry’s institutions, key stakeholders and regulatory bodies is that their response has been to a focus on self- interest which is not aligned or reflects the best interest needs of the consumer.”