SYDNEY (Reuters) - A major Australian financial planning network has closed after being told its license could be suspended or canceled, the corporate regulator said on Monday, becoming the latest casualty in the country’s scandal-plagued financial sector.
The 400 adviser-strong Dover Financial Advisers, with about $2.3 billion in assets under management, had been under investigation by the Australian Securities and Investments Commission since 2017. It came under additional scrutiny at a public inquiry into financial sector behavior earlier this year.
The regulator on Monday said Dover and owner Terry McMaster decided to cease operations after receiving notice of a hearing into suspending or cancelling its license.
“The matter has not gone to hearing but as a result of this notice, Dover & Mr McMaster have advised that, amongst other things, Dover will cease providing financial services,” a regulator spokesman said via email.
Dover did not respond to Reuters’ requests for comment on Monday, a public holiday in the state of Victoria where it is based.
The closure comes amid a government-ordered inquiry into financial sector wrongdoing. So far, the inquiry - dubbed the Royal Commission - has led to high-profile resignations, class action lawsuits, and share sell-downs at some of the country’s biggest companies, including fund manager AMP Ltd (AMP.AX).
The inquiry is also forcing change to long-standing industry practices, with Australia and New Zealand Banking Group Ltd (ANZ.AX) last month announcing it would cease paying bonuses to financial planners for selling its products.
In April, the inquiry scrutinized Dover’s practices and found the firm employed several advisers dismissed by other groups, and allowed advisers to audit their own advice. McMaster collapsed at a hearing while giving evidence.
Research by Adviser Ratings ranked Dover as Australia’s 11th largest planning firm with 401 advisers across 250 practices, making it one of the biggest networks not operated by one of the country’s big banks.
It had A$3 billion ($2.28 billion) in funds under management, according to its website on Monday.
Reporting by Alison Bevege; Editing by Christopher Cushing