The Australian Securities and Investments Commission (ASIC) has urged former clients of financial adviser firm, Dixon Advisory, to file complaints with the financial services ombudsman as soon as possible if they think they may have suffered losses through advice by the firm.
Dixon Advisory and Superannuation Services Pty Ltd went into voluntary administration on January 19 after ASIC began civil penalty proceedings against them on September 4, 2020, for alleged misconduct such as alleged inappropriate advice, conflicts and best interest failures.
Former clients of Dixon Advisory and Superannuation Services Pty Ltd (in administration, ‘Dixon Advisory’) may be eligible for compensation under a potential future Compensation Scheme of Last Resort but they will need to take action as soon as possible. https://t.co/Fuf4dp13ab
— ASIC Media (@asicmedia) August 3, 2022
Former clients of the financial advisor may be covered under a possible future Compensation Scheme of Last Resort (CSLR), recommended by the banking royal commission to ensure victims of financial misconduct receive compensation where the financial firm is insolvent.
“ASIC will soon be writing to former clients of Dixon Advisory to inform them that if they believe they have suffered loss as a result of the misconduct of Dixon Advisory and/or their former Dixon Advisory financial adviser in providing financial advice, they should make a complaint to the Australian Financial Complaints Authority (AFCA),” ASIC said in a statement.
“As complaints may only be made against firms who are members of AFCA, complaints against Dixon Advisory should be made as soon as possible.
“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.
“Lodging a complaint with AFCA is a necessary step for clients to preserve their possible eligibility under a potential future CSLR. However, even if a complaint is lodged with AFCA, a compensation outcome is not guaranteed.”
ASIC has said compensation depends on the establishment of a CSLR, the outcome of Dixon’s administration and “individual circumstances of the advice… given, as well as the scope and operation of a CSLR”.
Dixon Advisory has seen a turbulent couple of years leading up to its voluntary administration, including regulatory penalties, compensation claims and two class actions lodged against them.
The total claim against Dixon Advisory was just under $10 million when the firm went into voluntary administration, however, it is believed that number has since continued to rise.
Dixon Advisory has admitted to 53 occasions of breaching the Corporations Act for not acting in a client’s best interest and in July 2021 settled with ASIC, resulting in a $7.2 million penalty and $1 million in regulator’s fees.
Judgement for the firm’s hearing has been reserved.