It wasn’t a surprise to us at Wattle Partners when we heard the news that one of the country’s largest financial planning firms, Dover Financial Group was closing its doors early next month. It has long been industry knowledge that Dover was the dealer group of last resort for questionable financial advisers. It was a long time coming. There were rumours that ASIC was preparing to revoke Dover’s licence, so it seems like Dover’s managing director, Terry McMaster, pre-emptively pulled the pin before ASIC could strike. All its financial services will cease. That means 50,000 clients will not be receiving advice from the 400 or so advisers at Dover, what a disaster. The Royal Banking Commission interrogated McMaster about employing financial advisers with questionable histories. This is because Dover hired a large number of advisers despite having issues with their previous financial services licensees. Some included “serious breaches” of their licence conditions. Dover’s willingness to take on financial advisers with chequered histories and to adopt a policy that excluded their liability for the acts of these advisers is the reason regulators are up in arms. Misconduct and bad financial advice seem to run deep with this firm and it frustrates us because it reflects badly on the industry. If Dover goes into administration, who will be responsible for advice given in the past? ASIC is now limited in what it can do. There are many clients who are now stranded because of the company’s decision to revoke the authority of the advisers operating under its license. It will be interesting to see if many of these financial planners go else-where, given many have less than perfect compliance records and what will come of their clients.   Whilst on the Dover webpage, we delved a little deeper into the company’s investment mantra and model. We dug up an investment e-book called “Financial Planning for General Practice Registrars,” compiled by McMasters Accountants, Solicitors and Financial Planners. McMasters is obviously related to Dover Financial Advisers with Terry McMaster the responsible manager. The manual found on their website (click here) lists four basic rules investors should abide by: Keep it simple Never trust anyone with your money Never give up control Never invest in anything that pays anyone a commission. The e-book lists 8 ideas that financial planners should follow to help with tax minimisation and wealth maximisation. A few of these ideas have left us astonished and surprised at how poor advice has become. In a nutshell here are their eight ideas on how to become wealthy: Salary sacrifice up to $25,000 into an industry super fund. Buy a house, any house and rent it out. Buy a car and claim home to work travel as a deductible expense. Arrange at least $60,000 a year of income continuance cover Arrange life insurance Create testamentary trust for children. Create a will. Enjoy overseas study tour. This manual provides inaccurate and misleading advice that may not improve your financial position. Financial advice isn’t a one size fits all model where clients are slotted into the same strategy and products. This does not fulfil the best interest’s duty that requires that advice be reasonably likely to achieve the client’s goals…

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