AIOFP cites Treasury ‘stench’ around CSLR
Is there a Treasury conspiracy behind the manner in which clients of Dixon Advisory have had the earliest access to the Compensation Scheme of Last Resort?
That is the question being posed by the Association of Independently Owned Financial Professionals (AIOFP) which has written to the Assistant Treasurer and Minister for Financial Services, Stephen Jones, expressing financial adviser perturbation and suggesting a “stench”.
In an open letter to Jones, the AIOFP executive director, Peter Johnston has said his organisation is “greatly perturbed by the suspicious circumstances surrounding the DIXON/CSLR/CANBERRA BUREAUCRAT nexus and the preferential CSLR compensation treatment of Dixon victims when all other consumer victims of alternative product/advice failures are precluded”.
“We think there is a distinct ‘stench’ of either corruption, manipulation and/or profound conflicts of interest within the construction/operations of CSLR which was directed and managed by Treasury Bureaucrats and/or their associates,” the letter says
“We base this on the following –
- The Dixon Advisory group was head quartered in Canberra until its failure in early 2022 with several Canberra based residents and Federal Government Bureaucrats as private clients. We believe several of the Bureaucrats/Associates worked in the Department of TREASURY and they all face heavy individual financial losses from the failure of the Dixon Group.
- In 2019 Commissioner Hayne recommended the CSLR be 1/1/2008 retrospectively applied to include numerous other failed Products/Advice affecting over 100,000 consumer victims – see attached documents and page 36 of the FSRC booklet.
- Both sides of Politics argued against the retrospective aspect at different times from 2020 which we suspect was instigated by the Institutional lobby not wanting to be held accountable for the management and performance of their failed funds [how unfair…]. No surprise, the retrospective notion was subsequently and comprehensively defeated.
- The Advice community wants an explanation as to why ONLY the DIXON private clients get preferential treatment with CSLR and not the thousands of other Consumers facing losses over the years with failed funds and the related advice outcomes – the very consumers Comm Hayne wanted compensated are being denied access.
The letter asks the Minister for a response within 30 days, stating, “we think it is grossly unfair to expect the Advice community to fund the recovery of losses incurred by Government Bureaucrat personnel decision making when it appears they have engineered an advantage over other consumers to benefit themselves. Please also note there was bipartisan agreement that CSLR was not to be applied retrospectively”.
Well said!! The stench of malfeasance and skullduggery permeates every level of government. Only the AIOFP has the integrity and courage to call them out on it.
I was a member of the FAAA but haven’t renewed. Just no point given this corruption.
Ditto…I was a CFP for almost 20 years and left the FPA as they did nothing to protect their members and were nothing more than government yes men…..a real shame
There is no denying the scale of the Dixon Advisory / CSLR scandal, however a history lesson and some fact checking seems necessary here. The CSLR was first recommended by the Ramsay Review in 2017. They said that it should be prospective, industry funded and only apply to financial advice. The Hayne Royal Commission agreed and said that it should be implemented as recommended by the Ramsay Review. It was the former Coalition Government in February 2019 that provided AFCA with the power to look at older matters back to 2008. That was not with respect to the scope or role of the CSLR. The Government, of their own accord and resources, agreed to fund unpaid determinations up to the commencement of AFCA in November 2018. Throughout the process, there was always a commitment that it be a prospective scheme. Finally, Dixon Advisory clients are captured under the CSLR scheme as any other advice clients are. Behind the Dixon Advisory debacle is a very big product issue (URF), however the cases are being assessed for advice failures. This is a huge scandal and it needs to be investigated, but please get the facts straight.
Yet ASIC said it is not going after the individual advisers as it was a Dodgy Dixon’s management top down order to flog Dodgy Dixon’s MIS / URF fiasco.
So advisers aren’t to blame directly but let’s get Advisers to pay via CSLR.
This whole debacle stinks beyond the rest of corrupt Canberra.
And as for MIS products being excluded from CSLR, another corrupt Canberra decision.
So why doesn’t ASIC go after the dodgy Dixon’s management? Is it because a senior manager at Dixon’s now works with treasury and ASIC wants to protect them?
If the cases are advice failures only, why hasn’t a single Dixon’s product adviser been banned or reprimanded? Clearly the advisers didn’t do much wrong at all. Advisers are once again the convenient scapegoat for product and big corporate failures, and we are being forced to pay for this rotten situation. A totally disgusting outcome considering the majority of financial planners are small business operators. We have had a gutful of this bullying and abuse from Canberra.
The cases are being assessed as ‘advice failures’ based on technicalities. This is why none of the financials advisers involved have been banned. The scandal was caused by a) product failure and b) management of a large organisation using financial advisers to sell their product. There will not be a proper investigation, because the first recommendation from any such review would be to ban product providers from employing financial advisers. Neither political party would want that as it would hurt their agenda which is aligned to big product advisers who pay them off with political donations. Canberra is hopelessly corrupt on this unfortunately. Financial advisers and the wider public who are priced out of professional advice are just collateral damage.
The Dixons property fund failure all centered on the poor tax advice Dixons received too. Should we bill accountants for the failure too?
Yeah – where’s the compensation for all the clients of those products AIOFP directors promoted??? It isn’t fair that only Dixon customers get compensated!
Maybe Mr Jones could get someone from treasury to respond. I think Nerida Cole, who previously was the head of advice at Dixon’s, who is now employed at Treasury as the Director of the Financial Adviser Regulation Unit would be suitable. She obviously has intimate knowledge since she oversaw the poor advice and processes that caused the problem in the first place. I sure every good honest adviser would feel great that a senior manager at Dixon’s is now responsible for judging other advisers.
you are kidding right????? unbelievable!!!!!!
If Johnston is on the money here, this should be front page news and FAAA should be screaming loudly.
The normal diplomatic approach “lets argue logic and outcomes for consumers etc, etc” that FAAA pursue is a failure.
And they need to rethink their approach – no one is listening to them.
Me and the fella’s had a real laugh when we came up with the concept of a Qualified Adviser. “Backpackers”…. Qualified Advisers hilarious one that was. You’ll recall we wrote the FoFA review and said we don’t care about job losses as you’ll all be replaced by computers eventually. Remember that…
You might recall also we wrote that ditty of a piece around fee agreements too. Can’t sign it on Monday cause the anniversary is Tuesday… That was one of my personal favorites, plus fee consent forms. I did try to slip in there too about the SOA’s needing to be read and advice fees banned, but oh well. at least we got GST credits removed.
This all began when I rolled my CSS Defined pension to AMP Flexible Lifetime super and paid 5% entry fees….then to make it up I went to Dixon.
We’ve been doing our best ever since to write you guys off…. and I think we’re doing a pretty good job and there is Zip you can do about it. Qualified Advisers….still laughing about that one…..mmmm what next.