Parliament Agrees to Inquiry Into Dixon Advisory Collapse

The FAAA has announced it has secured an inquiry into the collapse of Dixon Advisory, which it says has left the wider financial planning profession to cover as much as $135 million of the compensation bill for the firm’s misconduct.

The association stated in a release that a motion calling for an inquiry into the Dixon Advisory collapse was moved by Senator Pauline Hanson, which secured cross-parliament support and resulted in a public inquiry being agreed.

The FAAA statement noted the inquiry will be based on terms of reference advocated by the association and will seek to address key concerns about the collapse of Dixon Advisory and its impact on the Compensation Scheme of Last Resort, including:

• The causes of the collapse
• The effect of the US Masters Residential Property Fund (URF)
• The actions of key individuals and the regulator (ASIC)
• The impact of the administration and insolvency issues
• The potential implications for future matters

FAAA CEO, Sarah Abood, said this development “…marks a major step forward for our profession, and we want to thank Senator Hanson for her support in seeking transparency and for backing Australia’s small financial advice businesses in proposing this inquiry today.”

An inquiry is essential to understanding the full scope of what went wrong with Dixon Advisory

Abood added, “An inquiry is essential to understanding the full scope of what went wrong with Dixon Advisory – a scandal involving hundreds of millions in client losses – and to ensure it is not repeated.”

The FAAA notes it met with Treasury last week, and with Minister Stephen Jones in August, to raise key concerns regarding Dixon Advisory and the CSLR. It says it also wrote to all parliamentarians last week asking for their support for a public inquiry.

“The FAAA has been a vocal advocate for reforms to the funding model of the CSLR and has repeatedly called for deeper investigation into Dixon Advisory to prevent similar collapses in the future,” Ms Abood said.

“The financial advice profession is made up of thousands of small businesses right across the country, helping Australians achieve their financial goals. We do not have the financial capacity to underwrite the misconduct of large companies, and nor should we.”