AFCA confirms Dixon Advisory skewed advice complaints
If the collapse of Dixon Advisory were not in the mix, then complaints relating to investment and advice handled by the Australian Financial Complaints Authority (AFCA) would have been at an all-time low last financial year.
AFCA’S annual report has confirmed that 2,709 complaints relating to investment and advice were handled by the authority last financial year, with AFCA noting that the record low “reflects the positive impact of enhanced education standards and increased professionalism within the industry leading to fewer disputes.
It said that despite the overall downward trend in advice complaints, inappropriate advice was the most complained about issue, accounting for 706 complaints or 20% of the total.
AFCA said it closed 4,118 investment and advice complaints in 2023-24, “more than the total amount we received for the year and helping reduce our backlog of complaints”.
“This was an 82% increase in closures in comparison to last year. A large number of the closed cases related to the Dixon Advisory and Superannuation Services collapse,” it said.
In annual report commentary, AFCA pointed to continuing issues with respect to retail and wholesale investor classifications.
It said that in both Contract for Difference (CFD) and advice areas, misclassification of clients as wholesale remains a recurring problem.
“Many CFD providers fail to adequately assess client suitability, resulting in inappropriate risk exposure,” the annual report said. “Wholesale clients do not benefit from ASIC’s product intervention orders, leading to increased risks, including excessive leverage for those who may be better suited as retail investors.”
The commentary also suggested that there is “ongoing confusion in the advice space regarding the classification of SMSFs as wholesale”.
“Some advisers incorrectly apply thresholds of $2.5 million in net assets or $250,000 income, instead of the $10 million limit specified in the Corporations Act 2001 for superannuation products. This misclassification exposes clients to unsuitable advice,” it said.
AFCA is a joke!! Don’t believe any crap that flows from this crooked biased organisation that’s designed to destroy lives and print money!!
For advisers you never ever win even when you win you lose!!!
This is just a indication of the banks, insurance and super not being able to give advice Sorry just flog their own products….. It isn’t a result of the advisers having to education becuase small med business adviser look after their clients. unlike insurance big super funds and insurance they just see clients as another number to sell too to increase profit
Cut out Dixon’s clients. Put them in a too-hard basket if you will. Many of them were apparently well enough educated to work out what they were getting into. I shouldn’t have to pay for their inability to manage their own risk. Complaints from advised clients going down, way down. CSLR going up, way up. If this wasn’t a Govt organisation I’d say it sounds like money laundering.