The Australian Securities and Investments Commission (ASIC) has commenced civil penalty action in the Federal Court in Melbourne against Dover Financial Advisers Pty Ltd and its sole director, Terry McMaster.
ASIC alleged Dover misled and deceived clients from September 2015, when the dealer group introduced its Client Protection Policy, to March 2018 when it withdrew the policy in response to the corporate watchdog’s concerns.
The policy contained false and misleading representations as to the rights and protections available to clients and created a significant imbalance in Dover’s and its authorised representatives’ rights and obligations compared to those of clients.
It also sought to protect the interests of Dover and its authorised representatives by avoiding liability to clients for poor financial advice.
The corporate regulator also alleged McMaster was knowingly concerned in that conduct.
He was named as the key person on Dover’s Australian financial services licence (AFSL), was its sole director and the only responsible manager during the relevant period.
ASIC is seeking declarations that Dover and McMaster contravened the financial services law and pecuniary penalties against both for those contraventions.
This proceeding continues ASIC’s enforcement action in relation to Dover’s protection policy, which to date has resulted in the cancellation of Dover’s AFSL and McMaster’s permanent exit from the financial services industry.
The policy purported to be “designed to ensure that every Dover client get [sic] the best possible advice and the maximum protection available under the law”.
However, in ASIC’s view 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.
