Despite industry headlines focusing squarely on Shield and First Guardian over the past two years, Dixon Advisory still represents the largest share of claims paid by the Compensation Scheme of Last Resort as at May 31.
Per the latest compensation figures, the CSLR has paid $146.3 million relating to 1,071 Dixon claims. And while the scheme’s principal actuary, Finity Consulting, expects all pre-CSLR Dixon claims to be finalised in FY2027 – there were an estimated 1,500 of these when the scheme launched – there’s still the remainder to consider.
In its initial CSLR levy estimate for FY2027, Finity noted that there have been 2,728 unique Dixon claims lodged with AFCA to date.
If Finity’s estimate of $135,000 for the average Dixon claim holds true (which it roughly has since the scheme’s inception), the CSLR could end up paying out a further $223.7 million in claims relating to a company that collapsed in 2022.
At this stage, it’s difficult to determine how illustrative the Dixon complaints pipeline will be in terms of future compensation payments related to Shield and First Guardian. As Finity noted, there are numerous factors that will affect AFCA’s ability to make relevant determinations, including:
- How many affected investors lodge complaints
- Whether or not AFCA determines that advice provided in relation to Shield or First Guardian was inappropriate
- Whether the advice firms in question remain solvent when determinations are made
What is clear, however, is that the CSLR levy for advice businesses is unlikely to contract anytime soon. Finity said that the proportion of AFCA’s workforce focused on making “CSLR-relevant determinations” will remain at capacity up to and throughout the 2027 financial year, and that “Shield and First Guardian are expected to lead to significant levels of AFCA complaints.”
“This is a significant area of uncertainty of our initial estimate, and it is possible that a revised estimate for the FY2027 levy period [will be] materially higher than this initial estimate if it becomes clearer that Shield and First Guardian claims are likely to be paid [during this period],” Finity’s report said.
Further complicating estimates, around 3,500 Shield and First Guardian complaints have been lodged with AFCA, and over a third of these relate to Interprac Financial Planning.
Because of Interprac’s lawsuit against AFCA, the majority of complaints received over this period have essentially been put on hold. While AFCA is still accepting Interprac-related complaints, no formal decisions will be made until legal proceedings are resolved.
Dixons CSLR claims back dated by bureaucrats so loads of the same bureaucrats get paid CSLR.
Of course not the Last Resort as ASIC let Dixons phoenix about $50mill of value to E&P for $0.
Add 80% of Dixons claims are BS “But For” where no capital was lost.
And the Govt paid only 1 Dixons claim.
Corrupt Canberra stealing money from innocent Advisers for hundreds of Million when Dixons claims on CSLR should be NIL in so many ways.