ASIC urges former Dixon Advisory clients to lodge complaints 'as soon as possible'

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.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.