Bragg flags tough assessment of ASIC in final report
Just days after the Australian Securities and Investments Commission (ASIC) filed an 11th hour supplementary submission with the Senate Economics Committee the chair, NSW Liberal Senator, Andrew Bragg, has presaged delivering a scathing critique of the Government and the regulator.
In doing so, he has also signalled that the report will recognise that financial advisers have, in many instances, been treated unfairly.
Bragg took to social media to flag his intentions, stating as follows:
“As chair of the Senate Economics Committee, I understand financial advisers are under huge pressure. Next week, I will be addressing some of the pain points with ASIC levies in the final report of the Senate Economics Committee inquiry into ASIC investigation and enforcement.
I know financial advisers have been ignored by the Labor Government on three key areas:
ASIC levies
Compensation scheme levies / Dixon scandal
Unworkable drafting on restricting members from using their super to pay advice fees.
I understand that financial advisers are very worried about the upcoming CSLR levy, which has blown out massively due to Dixon Advisory complaints. And you should be worried.
The claimed Dixon losses are estimated to be $458 million according to AFCA, who have received 2500 Dixon complaints as of June 2024.
This is an increase of 500 since February. It’s been reported that the cost to the advice profession through CSLR levies as a result of Dixon Advisory could be above $100 million.
What’s happening here is wrong. I’ve been asking the question of why proper law enforcement hasn’t happened here, and why small businesses are carrying the can.
I set out the curious case of Dixon Advisory in a speech to the Senate last year:
Furthermore, at Senate Estimates just a few weeks ago I canvassed the issue of the Dixon Levy with the Labor Government. Their answers were callous and cold:
It is clear to me that Labor doesn’t care about the impact of these levies on small and medium financial adviser practices.
One of the most troubling parts of the ASIC inquiry has been the lack of action against the individual advisers who created this problem. ASIC has failed to do its job and the government won’t lift a finger.
At Senate Estimates, ASIC couldn’t tell me which Commissioner signed off on the decision to agree to a measly $7.2 million fine against Dixon, and the decision not to pursue the individual advisers who created the Dixon mess:
Next week we will deliver a report to address some of these matters, but in the interim, I thank all the advisers who have contacted my office with your concerns. I understand them and we are working on it.”
Are the LNP starting to actually try to support Financial Advisers rather than help kill them ?
It would be a very nice change after Frydenberg’s 9 years, followed by Jonesy’s 2 years of utter Adviser destruction.
It’s very easy to look caring in opposition. It will change if he ever gets back into the big seat.
Ah yes seems so true, how about opposition Jones v Jones in power.
Jones sure did talk a big game and has failed massively on delivery
thank you Andrew
Heartening comments, but he is wrong about one thing. Financial advisers have not been ignored by the ALP. They wooed us with promises, pretended to be our friend and then stabbed us in the back
A key source of revenue is now at risk, with super funds compelled to either audit our advice documents or no longer facilitate advice fees. Meanwhile, these same super funds will be given an unfair advantage, with unqualified call centre workers allowed to dish out financial advice despite not needing to adhere to the same rules, regulations and red tape that the rest of us must follow.
Industry funds will move swiftly to ban financial advice fees. Retail funds and wraps will eventually follow as it will be cheaper to allow their call centre operators to give “qualified” advice than audit every single advice fee paid to independent financial advisers, as ASIC and APRA will compel then to do (or else risk royal commission style look backs).
This is a deliberate ploy by the ALP, ASIC and Treasury to wipe out the independent financial advice profession altogether to consolidate the power of union controlled industry super funds. Our bureaucracies are full of left wing lunies who want to destroy private enterprise and the ALP are blinded by the rivers of gold flowing from the industry funds their union mates set up.
What a mess this has become Road warriors giving so called advice to industry fund members
without to my knowledge any proper education on super
Do they really think that someone working for rest would recommend Australian super or a retail fjnd like say colonial if it was in the members best interest
I note the adds on TV now say get advice
It’s like re living the past 10 years again only worse
We will end up right where we started with vertically integrated issues yet again
Everything you have right Andrew but if the adviser must follow process and this is the now recommended investments approved by management or the investment committee the individual adviser cannot and should not be blamed for a investment failing. Blame should be given to the directors and managers.
However if the adviser wasn’t following procedure and was doing high risk investments not appropriate to the client then yes they should be investigated but I would question how much information was given to the invests, risk profiles, first appointment, second appointment, review after review did they question or were they worried year after year or did they only raise concerns once the investment failed?
Interesting point you raise. You might read a document I found on the net yesterday “Dixon: a cautionary case of US – Australian tax issues” published on 8 February 2021 by Tax Notes International. Ostensibly it’s about Alan Dixon’s, living in the US since 2011, clash with the IRS re declaring profits from Dixon’s Australian operating companies and Dixon’s US operating companies, and declaration thereof. Just for a bit of spice, there’s a bit of PWC advice therein. The outcome of the case is not clear in this publication, but Mr Alan Dixon is now apparently living in NSW, laughing all the way.
In a comment above about the responsibility of individual advisers, I assumed you are talking about those advisers who worked for Dixon Advisory, none of whom appear to have been prosecuted by ASIC. The URF was only accessible to advisers working for Dixon. Now of course those advisers were in a vertical integration situation where pressure was put upon Dixon advisers setting up SMSF’s to put all or some of them funds into the URF.
Incidentally, a prominent female adviser used in Dixon promotional material no longer seems to be on the FAR. She won’t be paying any Dixon Levy.
There would have been a recommendation from the in-house Dixon investment committee as required of an AFSL. According to this report both Alan Dixon and Daryl Dixon where on the DAS investment committee which recommended that 4700 Dixon SMSF clients invest in the URF. So, where was Standard 3, and ASIC supervision thereof
According to Sen Bragg, AFCA has received 2500 complaints for a sum alleged to be $458 million. One wonders what happened to the rest of the investors who lost bucket loads, now that AFCA has closed off the complaints pipeline.
The key question, as noted above, is why hasn’t ASIC pursued the Dixon advisers, and Daryl and Alan Dixon,. Why hasn’t ASIC engaged in litigation based on a claim that Dixon advisers failed to “make reasonable additional enquiries” that famous catchall phrase thrown at advisers by ASIC when it suits.. ASIC sued Dixon for a relatively minor matter and cleaned up only $7.6 million.
So remaining advisers can give $2800 a year in a levy to ASIC for litigation purposes, and continue to see those funds not put to good purpose
The Dixon Levy, imposed by CSLR upon non- Dixon advisers a who could never access the URF, even if they wanted to, now demands those unconnected advisers to fork up for Dixon’s negligence, if not criminal activity. If AFCA agrees to all claims, and why wouldn’t they, $458 million across 15,000 advisers comes to $30,000 each and that’s not taking into account any extra tail.
I have long believed that the banks, the well-known political contributors to the Coalition, invented and funded ($11.5 m) FASEA with an intention to reduce self-employed independently minded advisers who represented competition. They succeeded, but unfortunately for them, publicity around the the banks own bad advice, and $25 million of consequential reparations, forced the bank boards to abandon wealth advice, leaving the rest of us with the shit sandwich
Now seemingly we have a Labor government hellbent on the same objective – remove competition for the industry funds from self-employed independent advisers, this time for the benefit of the industry funds and their union mates. Jones can polish it up as much as he likes, but it’s still a T….D
Well said Old Risky
Nerida Cole was the Dixon HoA now works for Treasury in their Financial Adviser Regulation Unit. You can’t make this stuff up!
She was also an Investment Committee Member for Dixon’s.
The presence of a Dixons marketing person and investment committee member within Treasury would be a great line of inquiry for Senator Bragg to pursue further. As would the number of federal bureaucrats who have personally lost money due to Dixons.
It’s becoming increasingly clear why regulators allowed Dixons to get away with obvious cowboy behaviour while investment returns appeared good, and why they are seeking compensation from completely innocent third parties after it inevitably fell apart.
This whole Dodgy Dixon’s MIS Fiasco stinks beyond belief:
1) ASIC had 10 plus years of warnings from Advisers and clients about this Dodgy Dixon’s URF MIS and DID NOTHING until the horse had bolted.
2) ASIC let Dodgy Dixon’s float on the ASX with full knowledge the mass numbers of reports of the Dodgy URF MIS and DID NOTHING but process the prospectus. Letting Dodgy Dixon’s owners pockets 10’s of Millions in the float $$$$$$$$$$$$.
3) Most of the Advice Industry knew Dodgy Dixon’s was promoting SMSF Admin at very cheap prices to snag SMSF clients with the compulsory clauses to use certain investments, Cash accounts and MIS / URF, forced vertical sales and ASIC DID NOTHING.
4) ASIC has stated that the Advisers were not pursued individually as it was a systemic Management control issue, yet ASIC have DONE NOTHING to chase Dodgy Dixons owners, directors, investment committee, Responsible Managers, etc.
5) ASIC actively helped MIS’s not be caught by CSLR with full knowledge of this MIS Fiasco, let alone all the other MIS problems. And thus knowingly making all problems Adviser problems, not product problems for Compo costs.
6) It now appears multiple Govt Bureaucrats from Treasury, ASIC etc were clients of Dixon’s and thus want Compo paid for themselves. No conflicts of Interest here hey Canberra.
7) ASIC advertised for AFCA complaints, knowing the Adviser were paying via the CSLR. How is this even possible or allowed.
8) ASIC forced AFCA to keep Dodgy Dixon’s membership in place years after being in Administration, so Advisers would pay via CSLR and Govt Bureaucrats would receive Compo.
Dodgy Dixon’s Directors, Owners, RM, etc should be held personally liable.
ASIC should be held liable for it’s total inaction and corrupt post actions.
If the above is true (and I have no doubt it is), especially about Treasury and ASIC staff being clients of Dixon Advisory, on top of all the other conflicts of interest and ideology we are seeing, this needs to be raised, highlighted and questioned in the public eye. Its concerning that as each week goes by, more and more conflicts of interest (and possible corruption) emerge from Government, ASIC and Treasury, with ASIC appearing to now be a completely rogue regulator, yet we can’t seem to get any action on having this highlighted and possibly dealt with. The FAAA clearly don’t want to poke the bear, but the reality is these conflicts of interest and ideology are what will ultimately drive the final nail into the coffin of our profession.
I am wondering why the former management of Dixon and the urf aren’t facing scrutiny. The puppet masters have ridden off into the sunset with their mega millions.
It is clear that there was an in-house asset allocation, driven by a “committee” that mandated use of related party products. Hire a bunch of inexperienced advisers to pass on the “views” of the committee, the client carries the risk and subsequently the loss, Alan Dixon’s sausage machine makes him a huge pile of cash. And he gets away with it…
Yet again the industry cops another reputational hint, our costs go up and these are passed onto clients.
How about holding directors, investment committees, responsible entities, asset managers and product manufactures responsible for once?
And let’s ban vertical integration once and for all…
I’ll be interesting to see tranche two of the DBFO legislation shortly.
I’m guessing it probably has more terrible news for the financial adviser profession within it.
My bet is the so called ‘simple’ advice scope allowed to be covered by the ‘(un)qualified adviser’ will be huge.
Good on Andrew Bragg, I encourage him to keep hammering away.
My obviously naïve concept of justice is that if you cause harm you either pay the reparations or you do the time.
The wife of Al Capone did no time even though she was married to him.
Why are honest and decent advisers asked to pay for these Dixon Ar$%holes via the CSLR??
When did guilt by association become a thing? How is it just or fair?
Calling them “advisers” is an insult to the decent ones.
It seems that Labor and the union flunkies who sponsor them failed burying the decent and professional advisers in red tape so now they are going after the innocent with s99FA (super fees) and CSLR to try and drive them financially from the advice space so the union sponsored racquet is complete and unassailable.
It’s like pronouncements from many communist/totalitarian regimes. The hubris, arrogance and blatant hypocrisy is clear for all to see yet they have no compunction uttering such rubbish and lies as their sense of self importance, righteousness and greed is so strong they are blinded to their total disregard for decency and justice.
Let alone supporting the decent Australians who don’t see any of this but will be reliant on good and unbiased advice for a decent and dignified retirement. They are just innocent casualties in the war that the so called “peoples party” and workers representatives cares not one jot about I suppose?