Dixon, UGC, Shield common denominator – related party transactions

Mike Taylor

Managing Editor and Publisher

11 September 2025

Related party transaction have been fundamental to the collapse of Dixon Advisory, United Global Capital, Shield Master Fund and First Guardian, according to the Financial Advice Association of Australia (FAAA).

The financial advice group has told the Australian Securities and Investments Commission (ASIC) that the collapses “have been central to consumer harm and the loss of trust in financial services and financial markets”.

In doing so, it has welcomed ASIC’s proposed update of Regulatory Guide 181 which it says represents an important opportunity for the regulatory “to set clear expectations about how related-party conflicts are identified and managed, including when these conflicts are embedded in structures rather than merely transactional”.

“It has become clear to the FAAA that this lack of clarity, as highlighted in the case of Dixon Advisory and others, has led to serious consumer harm. The consequences have been substantial, with downstream effects on the financial advice profession by having to pay for these failures through the Compensation Scheme of Last Resort,” the FAAA said.

“Related party transactions appear to be a central problem in all the recent major product collapses, including more recently with both Shield and First Guardian.

“The Shield and First Guardian matters have highlighted a range of issues with respect to the delivery of financial services, including the operation of cold calling outfits and the payment of marketing payments to entities that are associated with financial planning businesses.

“It is essential that the legal consequences of this are addressed and that this is reflected in the conflicts management guidance. The obligations of licensees in having oversight of their authorised representatives needs to address the expectations in understanding the existence of these arrangements.”

“It is not sufficient for conflict obligations to sit conceptually at the licensee level,” the FAAA said. “Obligations must cascade clearly to the adviser-client relationship.”

“We commend ASIC’s work in developing a “’roadmap’ that demonstrates the intersection of conflict obligations with related duties. This broad approach is useful, but it is important that it remains just that: broad.”