Based in Melbourne, Dover Financial has more than 400 financial planners operating under its license.
The closure was announced by Dover owner Terry McMaster in an email sent to the company’s network of financial planners on 8 June, according to a report by Fairfax Media.
McMaster famously collapsed in April when being cross examined by an Australian Royal Commission that has seen some of the great and powerful of Australia’s financial advisory industry put in the hot seat.
The email tells all planners to cease offering new advice immediately as the Australian Securities & Investments Commission (Asic) plans to remove Dover’s Australian Financial Services license (AFSL).
Further, the email says that Dover has agreed with Asic to cease all other services by 6 July.
It is believed the closure will leave around 30,000 of its clients, with more than A$3bn ($2.2bn, €1.9bn, £1.7bn) in funds under advice, in limbo.
McMaster apologises for the “short notice” in the email, saying the agreement with Asic was only made in the last 72 hours.
“Various aspects of the agreement, including the time of year and the speed of the closure, were entirely outside of our control,” McMaster says, according to the Fairfax report.
The email goes on to warn advisers that if they provide new advice after 8 June they will be personally liable for any damages.
“We are aware that this announcement has come very suddenly. We regret this immensely, but there is nothing we can do about it. We are also aware that this email is a somewhat impersonal way for you to hear that your arrangement with Dover must come to an end. Once again, this is beyond our control.
“Unfortunately, it has proven impossible for us to continue in the current environment. This is a cause of immense sadness to us,” McMaster said.
Asic has confirmed in a statement it has been investigating Dover last year and had signalled to the company it was “minded to suspend or cancel Dover’s AFSL “through a hearing process.
“The matter has not gone to hearing but, as a result of this notice, Dover and Mr McMaster have advised that, amongst other things, Dover will cease providing financial services,” the Asic statement said.