Less than 1% of Dixon Advisory complaints have progressed
Per recent data by the Australian Financial Complaints Authority (AFCA), complaints surrounding Dixon Advisory’s misconduct and inappropriate advice are largely on pause while it awaits the introduction of the government’s Compensation Scheme of Last Resort (CSLR).
The advice firm’s Australian financial services licence had been suspended in April last year for alleged conflicts, best interest failures and inappropriate advice, with the corporate regulator commencing civil penalty proceedings against the firm.
In August, consumers had been urged to contact AFCA if they believed they had suffered losses due to misconduct related to financial advice and to see if they were eligible for compensation.
Following this, AFCA data for the second half of 2022 found complaints against advice firms leapt from 26 in July to 1,478 in August, mostly related to Dixon.
In September, the number of advice complaints fell back again to 169.
By 1 March 2023, over 1,700 complaints had been filed against Dixon Advisory.
Per data updated on the virtual dashboard AFCA Datacube, the second highest number of complaints against financial advisers in H2 2022 was 614 against Best Leader Markets, followed by 22 against AMP Financial Planning.
However, while many complaints had been made against Dixon, just five of them had progressed to the case management stage, representing less than 1 per cent of the total number.
When contacted by Money Management, an AFCA spokesperson said this was because complaints were on pause. New complaints could still be made, but AFCA was unable to confirm a timeline of when they would be handled.
“In January 2022, AFCA was advised that Dixon Advisory had been placed into voluntary administration. As a result, AFCA paused progress of all complaints against Dixon Advisory,” it stated.
“This is in line with our policy for the handling of complaints involving insolvent firms, including those in voluntary administration. While awaiting the introduction of CSLR, these complaints will continue to be paused and will be assessed once any CSLR is established.
“AFCA will only be able to fully assess the impact of the CSLR and its relevance to paused complaints once the scheme is legislated. We will review all relevant complaints as soon as that occurs.”
The Financial Services Compensation Scheme of Last Resort Levy Bill 2023 currently sits before the Senate after it was introduced in March, but it was unknown when the legislation would be passed.
AFCA added that a former Dixon Advisory client’s eligibility for compensation would depend on the individual circumstances of the advice that they were given, as well as the scope and operation of a CSLR.
“Additionally, AFCA will also review the pause on complaints against Dixon Advisory when the outcome of the administration process is known, as this could also affect clients’ eligibility for compensation,” it said.
Dixon Advisory would need to maintain AFCA membership until 8 April 2024 as complaints could only be made against firms that were members of AFCA.
AUTHOR
Rhea Nath
Recommended for you
Having departed Magellan after more than 18 years, its former head of investment Gerald Stack has been appointed as chief executive of MFF Group.
Praemium is to acquire an advanced technology firm for $7.5 million, helping to boost its strategy to be a leader in AI-powered wealth management.
Next year will see AMP roll out an end-to-end solution for its North platform, marking a shift in the firm’s position within the advice technology sector and building on adviser feedback.
My Dealer Services is predicting strong growth in self-licensing next year, citing recent ASIC action against Interprac and the desire for independence as key drivers of the self-licensing trend.
