Banking royal commission: Dover’s Terry McMaster blasts Kenneth Hayne

Terry McMaster has accused royal commissioner Kenneth Hayne of “deliberate misstatements” in his report.

The boss of banned financial planning network Dover Financial Advisers, Terry McMaster, has launched an extraordinary attack on banking royal commissioner Kenneth Hayne, accusing him of making “deliberate misstatements” in an interim report.

Mr McMaster, who collapsed under cross-examination during an appearance at the inquiry in April, has made a 50-page submission to the commission blasting Mr Hayne, counsel assisting Mark Costello QC, and the Australian Securities & Investments Commission.

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“Your report is full of deliberate misstatements,” McMaster wrote in a letter to royal commissioner Kenneth Hayne accompanying Dover’s interim report response submission. “The intention is obvious: to help ASIC build a false narrative on Dover.”

Spokesmen for the royal commission and ASIC declined to comment on the allegations.

Mr McMaster, a solicitor by background and former director of Melbourne law firm McMaster Lo Andrawis, alleged in his submission that the royal commission chose to “suppress” evidence from ASIC that would have shown Dover in a positive light and suggested the inquiry had demonstrated a lack of “procedural fairness”.

Terry McMaster leaves a royal commission hearing with the aid of paramedics after collapsing under questioning in April. Picture: AAP

He claimed the commission was complicit in a “sinister” plot to shut down the now-defunct ­financial planning network. He also blamed Mr Costello’s “aggressive” cross-examination for triggering depression and symptoms of post-traumatic stress disorder. Mr McMaster’s evidence to the commission was cut short when he began breathing heavily before collapsing and being taken to hospital in an ambulance.

On June 8, Mr McMaster wrote to Dover’s 400 authorised representatives saying their authority to provide financial advice had been revoked. They were given 30 days to find new AFSL arrangements and restricted from providing “new advice”.

ASIC subsequently accepted a court-enforceable undertaking from Dover and began the process to cancel its licence, with Mr McMaster agreeing to remove himself permanently from the ­financial services industry.

In his submission, Mr McMaster says the commission got a “critical fact wrong” by saying Dover’s closure was voluntary.

However, a letter from ASIC he cites in support of his contention states the regulator’s understanding he sought the “orderly closure of Dover’s business”.

ASIC’s investigation into Dover began in 2017 and concerned the licensee’s so-called Client Protection Policy, which Mr McMaster agreed under cross-examination from Mr Costello was “Orwellian”. The investigation found that the policy created a “significant imbalance in the rights and obligations of the adviser and their client” and should be considered “detrimental and unfair” to end consumers.

Dover also came under fire at the royal commission for its adviser recruitment process, facing intense questioning about the due diligence applied when authorising financial advisers who had previously had compliance issues raised by other licensees.

Speaking on Your Money’s Ticky last night, Mr McMaster said he regretted the policy but stood by its underlying premise, claiming Dover’s approach was “allowed under the law” and that, contrary to ASIC’s claims, it did not reduce Dover’s liability to compensate victims of bad advice.

Last month ASIC launched civil penalty action in the Federal Court of Australia against Dover and Mr McMaster, alleging misleading and deceptive conduct.

The Australian understands Mr McMaster intends to defend the charges brought by ASIC.

Aleks Vickovich is the editor of yourmoney.com.au