ASIC has urged former clients of Dixon Advisory & Superannuation Services (Dixon Advisory) — now in administration — to lodge complaints as they may be eligible under the potential Compensation Scheme of Last Resort but warned that they will “need to take action as soon as possible”.
On Wednesday (3 August), the corporate regulator announced it will be contacting former clients of Dixon Advisory who believe they suffered loss from misconduct by the company and/or a former financial adviser working for the company to make a complaint to the Australian Financial Complaints Authority (AFCA).
“As complaints may only be made against firms who are members of AFCA, complaints against Dixon Advisory should be made as soon as possible,” ASIC said in a statement on Wednesday.
“If Dixon Advisory’s AFCA membership ceases, then no further complaints can be accepted. We encourage former clients of Dixon Advisory to monitor their mailboxes, inboxes, and spam folder for correspondence from ASIC.”
ASIC has warned that a compensation outcome may not be guaranteed as the CSLR — which aims to provide limited compensation where a determination issued by AFCA that relates to a financial product or service remains unpaid — has not yet been established.
Adding to this, Dixon Advisory filed for voluntary administration in January and had its AFS licence suspended in April. However, AFCA will accept and register complaints lodged against Dixon Advisory “while it remains a member” and will pause any further handling of the complaints for a number of reasons, including the outcome of the administration process, potential class action litigation, and whether a CSLR is established.
The move comes after it filed for voluntary administration in January with E&P Financial Group directors saying at the time that it “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 which alleged that “Dixon Advisory failed to act in the best interests of clients after its investment committee reviewed, approved and recommended which products were to be pushed on to group members” whom Dixon Advisory stood to earn millions in fees from.
The liabilities also relate to claims against Dixon Advisory by the Australian Financial Complaints Authority (AFCA) and penalties by ASIC.
The AFS licence suspension allowed Dixon Advisory to continue to operate until 9 May 2022 to allow existing clients yet to transition to access services, and requires the maintenance of dispute resolution arrangements including AFCA membership until 8 April 2023.
The problems will not go away until you weed out the root causes, which is not the advisers, it’s the middle and upper management of places like Dixon Advisory, NAB FP, etc. All the top execs go on to their next plum job with their outdated thinking and reign havoc again. Need to ban anyone at executive level from our industry if they presided over any business which paid out more than $10m in complaints/remediation.
and yet Nerida Cole is now heading up financial advice standards for treasury!
Yep quality stuff Nerida Cole, 16 years driving Dixon’s and their clients into dodgy vertical integrated rubbish products, that have turned out to be the crap many Advisers alerted ASIC too.
So now Govt use her advice on how to destroy retirees lives ? Is that her role at Treasury ?
What an absolute disgrace Govt. and Dixon’s.
Another WTF MOMENT…..what are ASIC doing..? how is this promoting the profession..? why would you do a post graduate degree and sit and exam when you have ASIC blowing against you ….every day…I left long ago.
And this Ladies and Gentleman, presents yet another fundamental issue with the playschool we refer to as financial services.
Yes those that are left in the F S Industry are left to foot the Bill for the big four etc etc, pretty pathetic actually considering the Billions in profit they make, total disgrace.
Once the golden child that threw rocks at the product floggers.
Spot on. They ran that line for years, on radio & on paper, while every new client got an SMSF. The bloke who railed about “lifies” took full commiission on risk attached to SMSFs. Pot-kettle-black! GOOD RIDDANCE !
So the architects of this take off with the loot and the remaining advisers are left to foot the bill. Great work.
If there was ever an example of why product needs to be taken out of advice, this is a textbook case. The Quality of Advice review should stop looking at the self interest “submissions”, and find a way for this type of behaviour to be stamped out. If they can do that, it will lead to better outcomes for all involved.
Poor old Hayne thought it would be too hard, but look at the consequences for the individuals that end up wearing the brunt of it.
oh great…so I’ll be footing the bill for this….