A large wealth advisory group in Australia is shutting its doors amid regulatory scrutiny.

Dover Financial Advisers, a group with about A$3.0 billion of assets under management and a roster of around 400 advisors, has informed Australia’s financial regulator it is closing down, amid reports that its license could be suspended or cancelled. The firm becomes the latest example of compliance problems in the country’s financial sector.

“Dover has advised ASIC it will cease providing financial services,” ASIC said on its website as it advised former Dover clients how to ensure they receive adequate financial advice in future.

ASIC’s media page made no explicit reference to regulatory issues. As for Dover, there was no reference to compliance problems other than a reference to letter from owner Terry McMaster in April, referring to an ASIC notice. In that open letter to clients, he said: “I am writing to you regarding advice previously provided by Dover. This advice included materials incorporated into the advice by a hyper-text link known as the Dover Client Protection Policy. The Protection Policy has been withdrawn and replaced by the Dover Client Information Policy, with retrospective effect. The Protection Policy was deceptive because it contained certain provisions the effect of which were to avoid liability to compensate clients for any loss resulting from the advice provided. Dover does not and will not rely on these clauses in any dispute because they are unlawful and are voided by the financial services law and the general law.”

His letter added: “If you consider the advice provided to you has resulted in a financial loss you should seek independent legal advice or lodge a complaint with the Credit Industry Ombudsman and you should disregard the Protection Policy.”

Reports said the Victoria-based firm has been proved by the ASIC since last year, with additional scrutiny from the Royal Commission set up late last year by the government to probe financial wrongdoings among a number of major firms, such as Commonwealth Bank of Australia, AMP and others.

Ironically, the Dover website’s section on compliance includes the following words: “We have 12 staff in our Melbourne office alone dedicated to the review of statements of advice. Each of these staff holds a law degree and other relevant qualifications. We are pleased to say that our system works. Since 2012, no reviewed statement of advice or record of further advice has led to a successful client complaint.
This brings great peace of mind to all of our advisors – who also appreciate the opportunity to gain an objective second opinion about their recommended strategies.”

ASIC has in recent years launched a wealth management project to weed out incompetent and crooked advisors from the sector, with about 50 people so far banned and punished.