Dover Financial Group begins ASIC-forced shutdown

The Dover Financial Group is set to close leaving the $4 billion dollars of investor funds from around 30,000 clients in the lurch.

It follows news that Dover Financial Group's founder, Terry McMaster has entered the final stages of its agreement with the corporate regulator, Australian Securities and Investments Commission following his recent royal commission appearance that ended in him requiring hospitalisation.

The regulator intends stripping the firm of its operating licence.

The ABC reported McMaster's email announcement to his staff on Friday, where Mr McMaster stated that ASIC, required the firm to "cancel its AFSL [Australian Financial Services Licence] by 6 July 2018" and "terminate the appointment of its authorised representatives". 

 Advisers have to cease giving new advice immediately and stop servicing the clients completely by the first week of July.

The Australian Securities and Investments Commission has confirmed that its inquiries into the firm were ongoing.

Fairfax Media reported McMaster had sought until the end of the year to wind down his business but that ASIC had told him that his time was up.

The 400 advisers will need to find another licence-holder to work under.

In the period to 1 April 2018 Dover incorporated a document known as the Dover Client Protection Policy into its financial services guides and its statements of advice.

On 22 March 2018 Dover was notified by ASIC that it had reviewed the Dover Client Protection Policy and believed it contained certain provisions which were unlawful and void.

The Dover website noted it does not know of any client adversely effected by those provisions.

"In good faith Dover cooperated with ASIC and immediately withdrew the Dover Client Protection Policy and replaced it with the Dover Client Information Policy, with retrospective effect, and undertook to not rely on the relevant provisions.

"Dover also wrote to each client potentially affected by those provisions."