Major step forward for the profession: Industry welcomes 'essential' Dixon inquiry

On Tuesday, ifa reported that the economics references committee will scrutinise the collapse of Dixon Advisory and its impact on the Compensation Scheme of Last Resort (CSLR) after a motion moved in the Senate by Senator Pauline Hanson secured cross-parliament support.

Scheduled to take place and report by the last sitting day in March 2025, the inquiry will address several key issues including the underlying cause of Dixon’s collapse, the effect of the US Masters Residential Property Fund, the actions of key individuals and ASIC, the impact of the administration and insolvency issues, and the potential implications for future matters.

In a statement released on Tuesday afternoon, the Financial Advice Association Australia (FAAA) declared victory, having led the charge in calling for an inquiry into the CSLR.

“Today marks a major step forward for our profession, and we want to thank Senator Hanson for her support in seeking transparency and for backing Australia’s small financial advice businesses in proposing this inquiry today,” said the CEO of the FAAA, Sarah Abood.

“An inquiry is essential to understanding the full scope of what went wrong with Dixon Advisory - a scandal involving hundreds of millions in client losses - and to ensure it is not repeated.”

The FAAA has been raising its concerns over the handling of the Dixon Advisory case for months and the implications for the broader financial advice profession.

As part of its advocacy, the body met with Treasury last week, and with Minister Stephen Jones in August, while also addressing a letter to all parliamentarians last week asking for their support for a public inquiry.

“The FAAA has been a vocal advocate for reforms to the funding model of the CSLR and has repeatedly called for deeper investigation into Dixon Advisory to prevent similar collapses in the future,” Abood said.

“The financial advice profession is made up of thousands of small businesses right across the country, helping Australians achieve their financial goals. We do not have the financial capacity to underwrite the misconduct of large companies, and nor should we.

“This inquiry is a crucial step forward in understanding what went wrong at Dixon Advisory, and ensuring it can’t happen again.”

Sharing the FAAA’s win on LinkedIn, the body’s general manager of policy, advocacy and standards, Phil Anderson, emphasised the extensive efforts made to ensure a thorough investigation into the CSLR.

“There will be a lot more work to put our case forward, highlighting the issues with what Dixon Advisory did and the design and implementation of the CSLR, however today is a great start,” Anderson said.

The inquiry has been unanimously welcomed by the wider profession.

Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals said: “Great news today around the CSLR/Dixon inquiry”.

Others took to social media to celebrate the win, with financial adviser Nathan Fradley writing on LinkedIn: "Massive news, well done Phil and the broader FAAA team".

Similarly, Keith Cullen, managing director at WT Financial, said: "Great job on the relentless pressure Philip Anderson and Sarah Abood. Here's to encouraging everyone to unite behind the cause".