Chapter 14 – Why would Terry do this?

A moment to reflect: “why would Terry do this?”

Wait a minute, could Terry’s advice to Amit be that bad? You can read it again here: Terry’s statement of Advice.  Should we not get a second, third, fourth or even fifth opinion before forming a view about Dover? Did ASIC ever stop and reflect on the critical questions of “how?” or “why?” Did anyone at ASIC challenge the confirmation bias and group think dictating Peter Kell’s goal must be ASIC’s goal? Did anyone at ASIC ever question why the facts must fit Peter Kell’s pre-conclusion that Dover must close, because of corruption at the top.

More about Terry

Terry was age 57 when ASIC forced Dover to close. Terry was an experienced professional who practiced as a solicitor, accountant and financial planner. He employed more than 80 staff across two countries, most of whom were professionally qualified.

Terry had an unblemished professional reputation since starting his career at age 21. He could certainly be firmly undiplomatic and was known for his occasional bluntness, particularly with advisers who did not want to do the right thing by their clients.

Terry was outspoken about the clash of interests that is institutional financial planning. His occasional column “Friday Reflections” often provided cutting comment, sometimes without writing a word, as you can see from the attached piece titled Pants on Fire first published in 2016:

Terry took on other topics too. He was particularly vocal about sexism[1] and racism[2] in the financial planning industry:

You can read more of Terry’s unorthodox[3] views at Friday Reflections Friday Reflections on the Dover website. Take a tour. Have a look around.  These are the reflections of the one man, the one owner of the one non-bank AFSL ASIC dragged to the Royal Commission. Ripe for a public humiliation and reputation execution.

Doesn’t quite read right. Does it?

Is it possible ASIC got it all wrong?

A brief biography

Terry grew up in the working-class Melbourne suburbs of Oak Park and, after age 12, Mordialloc. He was educated at St Bedes College in Mentone and Melbourne University.

Terry has been married to Simone for nearly 35 years. Simone is a teacher at Kilbreda College in Mentone and Sandringham College for the previous 25 years, running special education programs. Terry and Simone had three young adult children, Ethan, training to be a solicitor, Esther, training to be a psychologist and Finnian training to be a carpenter.

Terry’s work experience includes being responsible for Colonial Mutual’s[4] income tax affairs in his early 20’s, being a tax manager at Price Waterhouse in his mid-20’s, being a solicitor with Phillips Fox in his late 20’s, owning and running large commercial farms in South Australia and Victoria’s western district, aged care interests, significant property and share investments, and portfolio investments in numerous smaller businesses.

Terry started McMasters’ one Saturday morning in October 1993, after losing an argument with his boss the previous evening. He soon found doctors seeking him out.  Within a year or two Terry was running McMasters’ Accountants, Solicitors and Financial Planners. This firm specialized in commission free services to doctors and dentists. It quickly became the largest of its type in Australia.

Terry was heavily involved in the Sumba Foundation Australia, until it merged in 2015 with its better-known counterpart Surf Aid[5]. Terry’s next charity was personally paying for 60 orphaned Vietnamese students to study economics at Ho Chi Minh City. These students would otherwise not be able to attend university.

Terry drives a Suburu Forester but prefers to ride his ten-year old mountain bike. Terry has completed Ironman triathlons and has represented Australia in age group long distance triathlon. Terry once trained to swim the English Channel but was not a good enough swimmer. But that’s where the name “Dover” came from. Terry still swims all year round in Melbourne’s chilly Port Philip Bay with a motley crew that calls itself Black Ice.

The Dover business plan

Terry’s business plan for Dover was simple: build it up to be the largest non-bank independently owned AFSL holder, with great compliance systems, and then sell it. The sale process was in train in early 2018, and the expected sale price was at least $30,000,000.

To be honest the $30,000,000 was a conservative valuation. It was relatively less than both the 2017 GPS sale to ASX listed Easton Investments and the 2017 Interprac sale to ASX listed Sequoia[6]. Dover had a healthy balance sheet with no debt and more than $6,500,000 of debtors. Dover and its allied businesses was possibly worth as much as $40,000,000.

Dover was making about $3,500,000 a year profit at June 2018. It was expected to rise above $4,000,000 by 30 June 2019.

Once Dover was sold Terry intended to return to McMasters’ Accountants, Solicitors and Financial Planners and resume working with his doctor and dentist clients. McMasters’ was the largest doctor and dentist accounting firm in Australia. A particularly pleasant part was writing a monthly column on finance for Australian Doctor, a leading medical journal. Terry had done this every month for more than 20 years.

Should we not get a second, third, fourth or even fifth opinion before forming a view about Dover?

Terry never accepted a commission in his life[7]. Even Dover was free of commissions: it refunded 100% of all adviser commissions to advisers. This way its compliance decisions were free of product bias and immune to conflict of interest concerns. Dover was the only large AFSL that did this. Obviously for the other AFSLs it was all about commissions, funds under management and premiums under advice. And next month’s product-based bonuses. Terry never recommended a managed fund other than commission free Vanguard index funds. Terry never recommended a retail superannuation fund other than a commission free low-cost industry superannuation fund or public offer fund. These were usually HESTA or First State Super due to its Health Super antecedents.

Did ASIC ever think “why?”

Terry was successful in his professional and personally. Terry enjoyed a well earnt reputation in his community. Terry had everything going for him professionally and personally. Did ASIC ever ask itself why Terry would lay waste to this?  Why would Terry throw his reputation as an independent and commission free adviser, free of external influence, in the bin by flogging apartments and superannuation early access schemes?

Please peruse this manual again: Dover Adviser Information Booklet April 2018.


[1] 80% of Dover’s team were female, including the CEO Florence Tee and the Compliance Manager, Yin Low

[2] Financial planning is notoriously dominated by white late middle age middle class men. Dover was 80% ethnic background, and not born in Australia. Dover was deliberately diverse.

[3] Yes, sadly not being sexist and not accepting conflicted remuneration is unconventional. And it will stay this way post the Hayne Royal Commission.

[4] Now owned by the CBA and trading under the CommInsure brand

[5] Dr Stephen Nolan won an Order of Australia for founding the Sumba Foundation Australia

[6] Both sales worked on a valuation of at least ten times maintainable future profits

[7] Corporation Act restrictions on using the word “independent” meant Terry could not describe himself as an independent financial planner But he was an independent financial planner. Terry’s accounting practice (now Curve Accounting) co-owners, Sean Dwyer and Bez Yilmaz, now call themselves independent, are authorised by Independent Financial Australia and are members of the Independent Financial Adviser Association Australia.

The Dover Group