ASIC probe continues as Dover Financial shuts doors

The closure of financial planner Dover, whose owner collapsed during the bank inquiry, has left 30,000 customers in limbo.

Terry McMaster leaves the banking royal commission in the care of paramedics after collapsing. Pic: AAP

The corporate watchdog is continuing to investigate Dover Financial after its principal and owner Terry McMaster, who collapsed on the stand under intense questioning at the banking royal commission, announced the scandal-ridden financial planning business would close its doors.

The Australian Securities & Investments Commission has moved to suspend or cancel the financial services license of Dover in the wake of the damaging hearing at the royal commission into banking and financial services.

It leaves about 30,000 financial advice customers with about $20 billion in funds under advice in limbo, after Mr McMaster wrote to the company’s advisers telling them the company would be issuing no further new advice.

Dover Financial, one of Australia’s largest advice houses, came under intense scrutiny after it was revealed it tried to protect itself from as many customer claims as possible by using an “Orwellian” “client protection policy”, which appeared to give more legal protection to the company than to its customers in almost every circumstance.

The royal commission also heard Mr McMaster threatened to sue a client who made a complaint to the Financial Ombudsman Service for defamation, and that he didn’t check the references of two planners, who were later banned, that he hired from troubled CBA subsidiary Financial Wisdom.

The royal commission hearing came to an abrupt end during Mr McMaster’s testimony when, under questioning by counsel assisting the commission Mark Costello, he began breathing heavily before collapsing and being taken to hospital in an ambulance.

“As part of an ongoing investigation commenced in 2017, ASIC served a notice of hearing on Dover that ASIC was minded to suspend or cancel Dover’s AFSL,” an ASIC spokesman told The Australian today.

“As a result of this notice, Dover and Mr McMaster have advised that, amongst other things, Dover will cease providing financial services.

“At this stage ASIC does not intend to comment further. ASIC’s investigation is continuing.”

Dover’s “client protection policy” was in force until late May this year when ASIC, which has been conducting a lengthy and wide-ranging investigation into Dover, demanded it be withdrawn.

Under the policy, clients agreed that Dover was not responsible if a financial adviser failed to do a long list of things, including consider their circumstances and undertake adequate research about a product.

They also agreed to hold any investment for at least a decade without complaining.

The Melbourne-based Dover has more than 400 advisers and 260 practices across Australia.