In a win for the corporate regulator out of the royal commission, the Federal Court on Friday found the now-defunct Dover Financial Advisers and its sole director Terry McMaster engaged in misleading or deceptive conduct.

The Australian Securities and Investments Commission's civil case centred on a client protection policy that claimed to provide Dover's clients with the maximum protection available under the law.

Justice Michael O'Bryan said the policy did not protect clients, but rather purported to strip them of rights and consumer protections under the law.

"The title of that document was highly misleading and an exercise in Orwellian doublespeak," Justice O'Bryan said in his written judgment.

"Many clauses of the client protection policy sought, perversely, to make the client responsible for failings and inadequacies in the advice provided to them."

Mr McMaster collapsed while being questioned about the client protection policy during a royal commission hearing in April last year and exited the financial services industry when Dover was shut down a few months later.

More than 19,400 clients received the client protection policy between September 2015 and March 2018, when Dover withdrew it in response to the ASIC's concerns.

Justice O'Bryan found Dover engaged in conduct that was misleading or deceptive or likely to mislead or deceive, and made false or misleading representations.

He said each time a statement of advice was given to one of the 19,402 clients along with the client protection policy was a separate contravention of financial services laws.

Justice O'Bryan also found Mr McMaster was knowingly involved in Dover's contraventions.

He noted the defence admitted Mr McMaster was responsible for determining and approving the content of the policy and requiring Dover's authorised representatives to give the documents to clients.

Justice O'Byran will decide on penalties at a later date.

Dover faces a maximum penalty of more than $2 million for each contravention and Mr McMaster $420,000.

ASIC deputy chair Daniel Crennan QC said the law imposed a number of obligations on companies licensed to provide financial advice and for the protection of their clients.

"Clients who receive financial advice should not be misled as to what those obligations are and what they mean for them and their interests," he said.

Melbourne-based Dover was one of the largest financial planning groups in Australia, with more than 400 authorised representatives, before it closed in June last year.

Dover admitted it was inaccurate to say clients had the maximum protection under the law, but argued there was no evidence that anyone was misled or deceived by the policy or suffered any loss from it.

Australian Associated Press