ASIC causes little children to cry.
ASIC forced Dover to close. Dover asked for four months notice for its advisers to find new AFSLs. ASIC’s Financial Services Enforcement lawyers initially agreed to two months but at the last moment cut it back to just 28 days. It appears Tim Mullaly, the Executive Director in charge of ASIC’s Financial Services Unit, gave the order.
Dover had no choice but to accept. The alternative, ASIC’s FSE lawyers insisted, was for Dover to be shut down on 15 June 2018 with no notice for its advisers to find new AFSLs. Have another look at ASIC’s letter to Dover dated 1 June 2018 if you doubt this.
The consequences for Dover’s 410 advisers were catastrophic. Lost clients. Lost businesses. Lost reputations. Lost incomes. Lost reputations. Lost homes. Drinking and alcohol abuse. Kids teased at school. Lost marriages. Lost retirements. Clients damaged. On-going pain and suffering. For some no end in sight.
ASIC was literally happy to do it. As Gervase Greene, ASIC’s National Media Manager, wrote on 12 June 2018:
“Phone’s run hot on this all day. I spoke to Louise (Macaulay) earlier, who was happy that we be seen on the front foot. Apparently Dover were looking for end of year, playing for more time. We said no.”
We now know ASIC’s decisions were based on faked evidence. Could a regulator behave any worse than this?
What a gross betrayal of the community’s trust.
Just one real life account of the damage done by ASIC’s FSE Unit. Multiply this by 410 advisers
From: Name deleted
Sent: Wednesday, deleted 1:24 PM
To: Peter Thompson <firstname.lastname@example.org>
Subject: RE: PRIVATE AND CONFIDENTIAL TO EX-DOVER ADVISERS
Here is my story:
The closure of Dover put my business in an almost untenable position.
It saw my young children, spouse and myself unsure if we would even be able to make our mortgage repayments, let alone staff wages and office rent. I had to go to work every day and not know if I would even have a business. At the end of each day, I had to go home to a wife in tears and children who would begin to cry as they wondered what was going on. No one was able to sleep with worry. Both my wife and I had to see our GP due to continuous panic attacks. Our children developed behavioural problems at school.
Obtaining a new letter of authority
In order to save my business, I was forced to take whatever dealer offer I could get. That meant I could not chose a provider that was at a reasonable cost. As such, my costs to open the doors have risen from just under $30,000pa to over $77,000pa! on top of that, we were just informed that this fee was going up by 10% to cover increased insurance costs. That is an additional rise of $7,700. That means I will be paying over $82,000 for something that was costing me $30,000. That is almost triple!
Dealing with Referral Partner’s
Prior to the Dover closure I had 3 active referral partners. After the closure, I immediately lost the 2 smaller ones. I was able to retain the largest one (50% of my practice), however, he is now actively referring those clients away from my business and this has cost me 30% of my FUM so far and approx. $50,000pa in ongoing revenue.
Lost revenue and Clients
I have lost over $50,000 in ongoing revenue and am no longer receiving new referrals which averaged $100,000pa in initial revenue.
On top of the legislative changes, the fact that I am a previous Dover adviser has seen the value of my practice fall from 2x(post current legislative changes) to under 1x (quoted by broker) as my business will be viewed as a bad risk, without even reviewing a file. That means that the closure of Dover has cost me over $330,000 in lost practice value.
Summary of my situation
Due to the Dover closure, I am now seen as unemployable if I wanted to go back into a Salaried role, a bad financial risk by banks if I wanted to borrow to grow my business and a bad risk for dealers to take my practice on, so I am effectively stuck with the one charging me huge amounts for the authority. This is on top of losing over 40 clients and my 3 referral sources. One of which is now actively endeavouring to move the clients they referred to me, away from my business. I have lost over $50,000pa in recurring revenue (15% of total ongoing revenue) so far with more going every day. So financially, it has cost me $330,000 in practice value, $50,000 in ongoing annual revenue (and increasing) and the lost revenue of new referrals which averaged $100,000pa previously. Emotionally, it has left my wife and I shells of what we once were. It has seen me go from a leader in the industry with over 16 years of experience to an unemployable pariah. Finally, it has left me without a business to sell for my retirement.
This is ASIC’s letter dated 1 July 2018. It makes it clear ASIC forced Dover to close. Dover had begged for more time for advisers to find a new AFSL. ASIC said no, and cut the agreed time from two months to just 28 days. It was a cruel move, intended to show ASIC was on the front foot playing hard ball with AFSLs other than those owned by the banks who fund ASIC.