Prologue: the industry average Report 562
Please bear these statistics in mind as you read the rest of this chapter: the quality of Dover’s advice was well above the industry average.
The first ASIC paper dated 12 December 2016 includes two specific SOA case studies. They are Example 3 – The advice of Terry McMaster, discussed in chapter 8 and Example 4 – The advice of Florence Tee, discussed in chapter 10.
ASIC goes further than the cases of Terry and Flo. They claim Dover advisers generally provide bad advice. ASIC deliberately makes Dover sound bad: it was ASIC’s plan.
Let’s examine ASIC’s claims 65% of Dover’s advices “fail,”, whatever that means.
Yes, if true (suspend your disbelief for just one moment more) this sounds like a high fail rate. ASIC says almost two thirds of all Dover SOAs “fail,” whatever that means. Even if true, 65% is not bad and is a lot better than each of the four big bank AFSLs and AMP. Their fail rate, according to ASIC’s REPORT 561, is 75%. Worse, 10% of their SOAs are likely to damage the client’s financial situation (and 100% only recommend in-house products).
This is a great graphic proving how biased the ASIC report on Dover really is:
Why do we say the 65% Dover fail rate is probably not true?
There are at least seven reasons why Dover believes ASIC’s 65% fail rate is not true.
|1||Andrew Davison and Leah Sciacca are incompetent investigators. They are revealed in earlier chapters as biased, dishonest and malicious. They blatantly lied about Terry’s advice and Florence’s advice.||3 to 15|
|2||Holley Nethercote in 2013 confirmed Dover’s SOA review process was “the most robust they had encountered”.||3 to 15|
|3||ASIC reviewed hundreds of Dover SOAs in 2016 and 2017. ASIC did not express any concerns whether these SOAs “failed” despite Dover constantly requesting feedback. One expects ASIC would have if it could have.|
|4||Dover applied the more stringent and correct test for whether the advice was in the client’s best interests in section 961B(1) rather than the “not really in the client’s best interests but ASIC will pretend it is under the “safe harbor” of section 961B(2).||18|
|5||Two notable reviews involved each of Adam Palmer, an ex-AMP adviser, and Andrew Smith, an ex-Westpac adviser. In November 2017 two separate ASIC committees met to ban each of Palmer and Smith following (four-years old) complaints from each of AMP and Westpac. Each banning committee tried hard, but in the end caved and conceded each did excellent work at Dover, in sharp contrast to what AMP and Westpac claimed. (This is discussed further below.)||25|
|6||Dover had a remarkably low FOS and CIO complaint rate. See below. It was about 1/10th of the average for a large AFSL.|
|7||Dover had 7 consultants review its processes between 2013 and 2017 Deloitte, PricewaterhouseCoopers, Holley Nethercote, Imac Legal, Integrity Compliance, Sophie Grace and Australian Super. This is detailed in chapter 5 and chapter 27. They all found Dover advisers provided good advice to clients||15|
A rather late check on Dover’s FOS complaint rate:
Andrew Smith was regarded as a rogue adviser by Westpac. ASIC wanted to ban him based on a Westpac report. ASIC could not do so. Andrew’s work at Dover since he left Westpac 4 years earlier was too good. Each of the 15 sample SOAs was in his clients’ best interest. This is four times the average for an institutional adviser.
 Attached as an appendix
 One must see the irony in Davison’s comment: look at his work, as detailed in chapters 8 and 10, and then reflect that this is the person now criticising Dover…
 Which means section 961B(1) is automatically breached and the institutional AFSL must rely on section 961B(2) to avoid breaching the law. As explained below, Dover, unlike the institutions relied on section 961B(1) not section 961B(2). Which is the more correct approach.
 Even if Dover’s fail rate was 65%, ie only 35% of advices were compliant. This still beat the industry average of 25% by 40%
 The case of Andrew Smith and the related case of Adam Palmer are detailed in chapter 25 “Mr Hayne’s helping hands: how Dover was set up at the Royal Commission. Obviously both cases completely refute ASIC’s claim that Dover advisers provided poor advice.