Advisers given 5 weeks to submit to Dixon inquiry
The finalised terms of reference for the inquiry into Dixon Advisory have been released by the Senate economics references committee.
The motion for the inquiry was proposed back on 17 September by Pauline Hanson’s One Nation Party, and it was confirmed this would be overseen by the Senate economics references committee.
A final report from the committee, which is chaired by Labor senator Jess Walsh, is due by the last sitting day in March.
Individuals and organisations are invited to make submissions to the inquiry by 1 November.
In terms of reference, which were confirmed on 20 September, they state the inquiry will probe “the reasons for the collapse of wealth management companies, and the implications for the establishment of the Compensation Scheme of Last Resort (CSLR) and challenges to its ongoing sustainability, with particular reference to Dixon Advisory and Superannuation Services Pty Limited (Dixon Advisory) as an example”.
While the primary focus is on Dixon Advisory, the inquiry is called Wealth Management Companies, and it will also consider matters such as the actions of directors and senior management of wealth management companies and how long wealth management companies can remain a member of Australian Financial Complaints Authority (AFCA).
The latter point has been raised as Dixon’s continued membership of AFCA extended beyond the typical period and allowed consumer complaints to mount up. Following industry pushback, the firm was expelled from AFCA earlier this year after receiving almost 2,500 complaints.
It did not specify if there were any particular other examples of failed wealth management companies that it would be considering.
Three of the nine points relate to ASIC, including providing information to affected investors when a company collapses, ASIC’s available options for enforcement action, and its role in investigating corporate collapses. As well as ASIC specifically, it will take a broader look at the financial services regulatory regime and vertically integrated businesses.
The same committee recently undertook a review of ASIC itself and its enforcement and investigation which published a final report in June 2024. This received 197 submissions and held five public hearings since the inquiry began in October 2022.
Finally, it will look at the impact of corporate collapses on the CSLR and design considerations of the scheme and potential implications for future matters.
The Financial Advice Association Australia (FAAA) previously met with the Treasury and with Minister Stephen Jones in August, on behalf of its adviser members, to raise key concerns regarding Dixon Advisory and the CSLR. The FAAA also wrote to all parliamentarians asking for their support for a public inquiry.
AUTHOR
Laura Dew
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