Terry McMaster (pictured) famously collapsed during a royal commission hearing in April. His company, Dover Financial Advisors, followed suit only weeks later after turning in its financial advisory license to the Australian Securities and Investments Commission (ASIC) as part of an enforceable undertaking.
Now, the watchdog has commenced official civil penalty action against both McMaster, as the sole director of Dover Financial Advisers, as well as the company itself for miselading conduct.
The watchdog alleges that Dover misled and deceived clients via its 'Client Protection Policy', which was active from September 2015 through to March 2018 when the policy was withdrawn.
ASIC suggested that Dover withdraw the policy as it allegedly contained false and misleading representations as to the rights and protections available to clients, created an imbalance of rights in favour of Dover and sought to protect Dover's interests by avoiding liability to clients for poor financial advice.
The watchdog also alleges that McMaster was knowingly concerned in the conduct mentioned above.
ASIC's action has been commenced in the Federal Court of Australia in Melbourne, with ASIC seeking declarations that Dover and McMaster contravened financial services law.
"The protection 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," says ASIC.
"This is inconsistent with or voided by the financial services law in the Corporations Act."
Business News Australia