ASIC admits 28 Dixon complaints starting in 2005
The Australian Securities and Investments Commission (ASIC) has confirmed that between May 2005 and the commencement of its investigation into Dixon Advisory in July 2019 it received 28 reports of misconduct in relation to Dixon.
In doing so, it said it received an average of over 11,500 reports of misconduct each financial year.
Explaining its approach to the Senate Economics References Committee inquiry into Wealth Management Companies which is squarely focused on the Dixon Advisory collapse and the Compensation Scheme of Last Resort (CSLR) it said the reports of misconduct related to varying issues including:
- (a) potentially misleading advertising;
- (b) inappropriate advice; and
- (c) corporate governance concerns.
ASIC said that of the 28 reports of misconduct it received, seven related to the US Masters Residential Property Fund (URF) and that the first of these reports was received on 25 November 2014 with concerns being raised about Dixon clients receiving inappropriate or conflicted advice in relation to acquiring interests in the URF, a related party investment.
“On 27 January 2015, we commenced a surveillance to examine these concerns. Using our compulsory information gathering powers we obtained information from Dixon, including a sample of client files, and we engaged with Dixon in response to some of the concerns raised with us. For example, in response to concerns that Dixon’s website included potentially misleading statements about the costs and performance of SMSFs, we issued two infringement notices on Dixon in 2015.”
It said that following further reports of misconduct, ASIC commenced another surveillance of Dixon and the URF on 4 May 2018 with one of the concerns identified by the surveillance being that clients of Dixon had been advised to increase their exposure to the URF in their investment portfolios by participating in additional capital and debt raisings by the URF in the period 2015 to 2018.
“The surveillance identified this as potentially not in the clients’ best interests and that advice on the URF was driven by Dixon’s business and advice model. We were also concerned about Dixon’s management of its conflicts of interest. This surveillance led to the commencement of an ASIC enforcement team formal investigation in July 2019,” ASIC said.
“Our investigation was scoped to consider conduct between January 2015 and July 2019. The scope included possible contraventions of s912A, 961B, 961G, 961J, 961K and 961L of the Corporations Act by Dixon and/or its officers, employees, representatives, and agents or related entities.”
“The focus of our investigation, and the underpinning of the subsequent civil penalty proceeding, were contraventions of the law associated with the business and advice model, and Dixon’s responsibility for that model. Our investigation focused on Dixon as the ‘provider’ (within the meaning of the Corporations Act)—that is, the entity responsible for the advice being provided under its licence, as well as the entity responsible for the business structure within which poor advice was provided.”
“In this matter, the relevant individual advisers were acting in accordance with the guidance and procedures set by Dixon, their licensee. While our action relied on evidence of certain clients and instances of advice given to those clients (because each individual breach needed to be established to the court’s satisfaction), the core regulatory concern was the structure of Dixon’s operation and advice model, which we alleged led to advice failures across the business.”
Useless ASIC do nothing to Dodgy Dixon’s directors, managers & AFSL RM regardless of knowing the whole operation stunk from the head down on the MIS fiasco.
Corrupt Treasury then employ Nerida Cole, Dixon’s manager of Advisers.
Now the Canberra bureaucracy dump their failures on good Advisers.
So just as with Storm, Opes Prime, and various others, ASIC had significant warnings about the obvious problems at Dixons well before things imploded. But consistent with ASIC’s long standing approach, they failed to take effective targeted action against a minority of wrongdoers.
Instead they devoted resources to broad based vilification and persecution of all advisers, including the honest majority. ASIC failed to protect consumers from the real sources of harm, and made it much harder for consumers to access good quality professional advice. Consumers have been consistently let down by ASIC.
@ Anon,
Correct, but the problem lies in the fact that the regulator has always found it easier to attack the low hanging fruit…..until the you know what, hits the fan.
Best case example in recent times has been what came out of the Banking and Financial Services Royal Commission.
Unfortunately, despite this, it has always been the case, even if something is approved by a Licensee and promoted by them, that the responsibility has always been on the adviser to show due diligence in any recommendation and justify why it’s appropriate for any client and what else was considered within the clients tolerance to risk and time frame.
Explain to me again why I am required to pay the ASIC levy/tax when they do absolutely nothing when they are made aware of cases of significant financial harm to consumers?
Another example which compliments Andrew Bragg’s report regarding the regulator.
I wonder if the clients were general mum and dads rather than canberra bureaucrats if this would have been the same outcome