The head of a financial advice firm has collapsed in the stand at the banking royal commission after being accused of lying.

Dover Financial Services sole owner Terry McMaster had been giving evidence to the commission for more than two hours when he began to experience problems.

Commissioner Kenneth Hayne QC immediately demanded he receive help and triple-0 be called before clearing the hearing room.

Paramedics assessed Mr McMaster in the Melbourne courtroom before taking him away on a stretcher to a waiting ambulance.

The dramatic development came after counsel assisting the commission Mark Costello accused Mr McMaster of lying during the hearing.

Mr Costello had asked a series of questions about Dover's customer protection policy.

"I put it to you it is Orwellian to describe this as a client protection policy," Mr Costello said.

Mr McMaster said: "I agree with that and of course this has been changed."

Mr Costello: "It is entirely misleading to describe this as a client protection policy."

Mr McMaster: "It actually wasn't intended to be misleading. It sort of evolved."

Terry McMaster had been giving evidence for more than two hours when he collapsed. ( AAP: Stefan Postles )

Mr Costello went on to ask what protection the policy gave the client.

Mr McMaster said: "I agree with that. It's a misnomer."

He then said there were other aspects of the document that were very much in favour of the client.

Mr Costello said: "I'm going to put to you that the way you have just described the policy is simply untrue."

Mr McMaster said he rejected that.

"In that rejection, I've certainly understood and regretted the use of the word 'protection'," he said.

"That's obviously been changed."

Mr Hayne put it to Mr McMaster that the document was misleading.

"I should perhaps say that if it were misleading or deceptive, that might draw attention to relevant provisions of the ASIC Act about making misleading or deceptive statements," Mr Hayne said.

Mr Costello was asking further questions when he noticed Mr McMaster was in difficulty and asked for the hearing to be stopped.

Dover took on advisers later banned by ASIC

Earlier, the commission heard Dover had hired a number of advisers who had had issues with their previous licensees.

One adviser, Julie Hamilton, was reported by firm Financial Wisdom to the corporate regulator for a serious breach.

However, Mr McMaster went on to hire her as he saw the issues as supervision problems that would not have occurred at Dover.

Mr Costello accused Mr McMaster of "trivialising" the reporting of serious compliance concerns to ASIC.

"I would reject that proposition," Mr McMaster said.

Mr Costello said: "You have just said that often times serious compliance concerns are reported to ASIC for commercial reasons."

Mr McMaster replied: "I have seen that happen before, yes."

Ms Hamilton went on to be banned by ASIC for three years.

Another adviser, Koresh Houghton, was permanently banned.

After repeated questioning, Mr McMaster conceded he had "got it wrong" by hiring the two advisers.

ABC/AAP