Dixon Advisory and Superannuation Services (DASS) – wholly owned subsidiary of E&P Financial Group (EP1) – confirmed the move in a statement, saying directors “determined that mounting and actual potential liabilities mean it is likely to become insolvent at some future time”.
The actual or potential liabilities relate to possible damages from proceedings that include a class action lodged by Piper Alderman last November that alleged that Dixon Advisory failed to act in the best interests of clients after its investment committee approved and recommended products to “be pushed on” to group members that Dixon Advisory stood to earn millions in fees from.
The liabilities also relate to claims against DASS by the Australian Financial Complaints Authority (AFCA) and penalties by ASIC.
In October, DASS was also sued by a couple for poor retirement advice that left them $900,000 worse off.
DASS confirmed on Wednesday (19 January) that PwC partners, Stephen Longley and Craig Crosbie, have been appointed as voluntary administrators.
EP1 managing director and chief executive Peter Anderson said the appointment was “necessary” due to the “increasing number of claims” against DASS.
“It has also become apparent that settling individual claims as they arise will likely lead to inequities between client creditors. Voluntary administration provides an appropriate framework to ensure all client creditors are treated equitably,” Mr Anderson said.
“Importantly, no client assets are at risk as a result of this process and we will strive to minimise any disruption to clients who will have ongoing access to their adviser(s).”
Another who was bitten by DASS’s vertically integrated products. We’re just small fry and the loss means it is now impossible to help our kids with some of their mortgage while Dixon swan around with all our cash. We have gone with an INDEPENDENT to help sort this mess out and reinvest what we have. While, I’m sure, there are reputable advisors our there, there are very few independent ones and we are steering clear of any conflicts and investing in ETF’s and the multiple indexes
ASIC asleep at the wheel again. Hits them with a slap on the wrist fine that does not help the poor clients one bit. ASIC should have closed this group down years ago but once again, failed to act.
another shockingly bad look for our industry
[quote=Sam ]I’m a Dixon client. Lost a large amount of super. But how do I know where to go to keep what’s left safe? We were with one of the ‘big’ broking firms at first and they were ripping out fees too. Any suggestions to this layperson? Who can I trust now? [/quote]
Stick it all in one of the big industry super funds. It will be fine and you concentrate on other stuff.
Sam – where these things go bad most times is firms want to “clip the ticket” in other areas. Pay for advice, provided the advice adds value – but don’t EVER invest in a product owned by the company giving the advice.
A big industry fund ???? Surely, you have to be joking.
I am. Long term Dixon client my smsf is with asic in breach I have lost more than $450k and part of the class action
saving for retirement was mandated (thanks PJK) the distribution means was not (for nothing!) from nonexistence to gold plated offices and now back to nothing what a complete waste of time effort and other peoples money.
Another large firm, with a massive amount of debt hurting badly. They failed to adapt, this is what happens.
And the first domino of the small players has fallen. Plenty more to follow given wafer thin balance sheets.
[quote=Stephen J.]And people complain about being part of larger groups. This is exaclty why being part of a larger corporate is important.[/quote]
Dixon’s was a known backwater for some time. This doesn’t abrogate the larger groups for the nonsense they have partaken in or may partake in going forward. The issue at hand is at the executive level of these organisations, be it historical or otherwise, regardless of size. It is these executives that need to be targeted by the misplaced ‘code of ethics’ and significant statutory penalties.
More than likely passed their FASEA exams and have completed all the relevant studies. How did this happen? 😉
The FASEA exam wasn’t hard… Passing it just means you know the rules, which should make it easier to prosecute them for breaking the rules.
I am glad someone gets it!
Seems there is a way to legally Phoenix a company
And people complain about being part of larger groups. This is exaclty why being part of a larger corporate is important.
your Joking. Corporates are the 1st to bail and stick it the small guys !!
Dixons is a larger group
The reason people complain about larger groups is because they are vertically integrated and use their control over advisers to push inhouse products. Which is exactly what Dixons did.
The solution to problems like Dixons is not to have larger firms doing the same dodgy things. The solution is to stop the dodgy things altogether by banning vertical integration.
I’m a Dixon client. Lost a large amount of super. But how do I know where to go to keep what’s left safe? We were with one of the ‘big’ broking firms at first and they were ripping out fees too. Any suggestions to this layperson? Who can I trust now?
Hi Sam,
Really sorry to hear you lost out in this mess!
I always tell prospective clients that you choose your adviser based on your comfort with them, how they answer your questions, do they understand what you want/need and do they have the expertise to help in those areas – in general it is gut feel though. Interview a few advisers like you get various quotes for trade related jobs – this may help you make a decision.
You could also ask friends and family for recommendations if they have had a good long term relationship with their adviser.
Good Luck!
I left Dixon in 2018 and moved to the largest Industry Superannuation fund in Australia. All good since. Getting out wasn’t easy, even at that time.
Bitcoin
Use a licensed advice firm whose owner or licensee doesn’t have any inhouse products. Every other aspect of licensed advice is now very tightly regulated, but inhouse products have surprisingly been allowed to continue. This was the cause of the problem at Dixons.
See I have no issues with an in-house SMA for example, it’s purely an efficiency play. As long as there is no fee attached. I have issues with firms packaging up properties as flogging them to clients
Most dealer group inhouse SMAs do have fees attached, which are an additional source of margin for the dealer group. Some also have ownership or “revenue sharing arrangements” with the underlying managers in the SMA. It’s just a subtler version of the Dixon con.
“Importantly, no client assets are at risk as a result of this process….”
I think he has missed the point. Client assets are at risk because of the advice you have given them. Where is ASIC?
I believe ASIC were always too friendly with this business in its early days in Canberra. Dixons always seemed to be allowed leeway that no one else had – advice scribbled on an A4 sheet of paper while everyone else did CARS. At the same time he rubbished any risk advisers who took commission to pay for advice and service. Then DASS proceeded to take full commission for any risk business they wrote. Bah humbug! Good riddance DASS