An Australian Securities and Investments Commission (ASIC) spokesman said in a statement that it had started investigating Dover last year and had signalled to the company that it was "minded to suspend or cancel Dover’s Australian Financial Services Licence (AFSL)" at a hearing.

"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 statement said.

The spokesman declined to comment further, citing the ongoing investigation.

Mr McMaster was contacted for comment.

An industry source, who had received the email from Dover, said the looming closure would be disruptive for the industry given it was very unlikely another licence holder would be keen to quickly pick up Dover's former advisers.

"Hundreds of advisers out there at the moment need to find a new home and there would not be a licensee in the country that would take on all those advisers en masse," he said.

Who will take responsibility for the advice given in the past by Dover?

Industry source

It would also put into doubt where customers could go if they were pursuing Dover for compensation, he said.

"If Dover goes into administration any client who has got a compensation matter in front of Dover or the Financial Ombudsman Service maybe become an unsecured creditor," he said, predicting the closure would add to the debate about the need for a government-backed compensation system.

"Who will take responsibility for the advice given in the past by Dover?"

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He said it was likely each adviser had more than 100 clients meaning potentially 50,000 customers could be affected.

The royal commission heard in May that Dover had employed several planners who had been terminated by other financial institutions for misconduct, despite warnings from the former employers, and used a team of young lawyers in its Vietnam office to undertake compliance tasks.

Dover also allows financial planners, including those who had failed audits at their prior employer, to conduct their own audits of whether their advice was appropriate rather than having a separate team to do so, the commission heard.

The royal commission also heard that Dover was the only financial institution in the country to decline Commissioner Hayne's invitation to provide a list of misconduct or conduct falling below community standards.

Mr McMaster has made strong comments criticising the regulator about banning planners and naming those planners, citing Common Law respect for the right of an individual to earn a living.