Law firm Maurice Blackburn is representing Clare Nairn and Mark O’Toole in a lawsuit against Dixon Advisory over allegedly inappropriate super advice in regard to the couple’s self-managed super fund which left them some $900,000 worse off.
Speaking to ifa, Craig Parrish, principal lawyer at Maurice Blackburn, confirmed that, according to the firm’s evidence, Dixon exposed the couple to financial harm for its own financial gain.
“Our clients placed their trust in Dixon Advisory as their professional advisers to help them plan for retirement in a balanced and measured way, and instead Dixon Advisory exposed our clients to a level of non-diversified and highly leveraged risk which they did not want nor need and invested them in products in which Dixon Advisory had a financial interest,” Mr Parrish said.
“Our evidence suggests that had Dixon recommended that our clients invest their super in a balanced portfolio over the same period, our clients would have been almost $900k better off today.”
This is the first one of these matters issued by Maurice Blackburn, but based on a number of client inquiries they’ve received, the firm is confident this will not be the last.
“We anticipate there are many others in a similar boat,” Mr Parrish said.
“Any clients of Dixon Advisory who believe the investments recommended to them may have been inappropriate for their goals and objectives, or performed below their reasonable expectations, are encouraged to contact us for further advice.”
Dixon Advisory declined to comment to ifa.
Just a few months ago, Dixon Advisory agreed to pay a $7.2 million penalty for breaches of the Corporations Act after the corporate regulator commenced civil proceedings against the firm for alleged conflicts.
ASIC claimed that Dixon Advisory representatives knew or ought to have known that there was a conflict between their clients’ interests and the interests of entities associated within the Evans Dixon Group.
In July, ASIC confirmed that it and Dixon had entered into heads of agreement which included court-ordered mediation and a hefty fine.
Why aren’t management being charged with fraud? They knew the allocation of investment was against there clients interest so obtained fees under false pretenses. The managing directors and chief executives should be in jail. It is simple theft by conning the gullible into false investment schemes. Until these people are jailed rather than fined it will encourage them to continue fleecing the public.
I thought Dixon had a great reputation though? Isn’t Daryl Dixon meant to be the best? I was a public servant in Canberra many years ago and only heard positive things. Guess I was wrong.
I feel really sorry for Dixon clients. They get the triple whammy. High fees, poor performing products, and now unable to get out of the investments.
Dixons have their own employees on the boards of these fund managers, who not surprisingly vote to keep the entity going and not wind it up – of course they say this is in the best interest of the clients..
It’s all fine. They would have provided their clients with an FSG, PDS and SOA. They would have even provided them with the new mandated FDS by ASIC. The regulator is all over the important stuff. Nothing to worry about here……..
Diversification 101 – what’s their investment philosophy?
Unfortunately my understanding is that the parties will merely be put back to the same positon as they would have been in if they did not enter into the contract and the best the complainant can hope for is statutory interest and not a balanced portfolio return.
Dixons is a great example of the problems caused by medium sized licensees who promote inhouse products. This whole issue is still alive and well with licensee SMAs. It is incomprehensible that Hayne didn’t do anything to ban vertical integration.
Vertical integration isn’t the problem. The issue is the reasoning behind vertical integration. If, as in the case with Dixon, it was used to promote in house products, gouge clients and be in the best interest of Dixon’s then yes that should be banned.
Isn’t this the case for all dealer groups that have in-house products. It is rarely about the client, but more about creating other ways to take fees.
The only way to eradicate this is to ban vertical integration. Let the products stand on their own two feet. If they are good, they will be rewarded by more advisers recommending them. If not, well bad luck.
You should also have an issue with these Industry funds (and some retail) bringing their investment teams inhouse rather than outsourcing too.
Nope. They are product companies doing their own product manufacturing. Nothing wrong with that.
Dixons (and many other dealer groups) are advice companies dabbling in product manufacturing. It creates an inappropriate conflict. When product companies dabble in advice (as union super, IOOF and AMP do) that also creates an inappropriate conflict, and yes I have an issue with that too.
I disagree that its incomprehensible. Banning vertical integration would have destroyed the industry fund advice model.
And this is a surprise???