FAAA Anger at Handling of CSLR

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“Everywhere that we looked, we saw inequity and unfairness. The more we looked, the angrier we got,” the FAAA’s Phil Anderson says in highlighting a new paper analysing the Dixon Advisory collapse and the association’s objections to the way it has been handled, particularly with regard to the CSLR.

Anderson’s new paper is the first of a three-part series and in it he lays out that the FAAA has identified its six most significant objections:

  1. Phil Anderson

    E&P Financial Group walking away from its subsidiary Dixon Advisory and “…leaving virtually the entire mess for the rest of the advice profession to pick up.”

  2. The Government failing to deliver on a commitment of a prospective scheme (in which the financial advice sector would only be expected to pick up the costs of claims after the scheme started), and instead launching the scheme with a massive overhang of legacy compensation to be paid.
  3. The Government committing to picking up the first 12 months of costs and claims for the CSLR, but then reducing that to less than three months and only covering one Dixon Advisory claim.
  4. The Government failing to disclose anything about Dixon Advisory or the likely cost in the Explanatory Memorandum to the CSLR legislation, and failing to do a regulation impact statement for the CSLR.
  5. ASIC failing to take action against Dixon Advisory in a timely manner and then only focussing on advice issues in their ultimate civil penalty action.
  6. ASIC postponing the end date of Dixon Advisory’s AFCA membership which seemingly has enabled multiple hundreds of extra claims in the final months.

Anderson says the association has documented its objections in as much detail as it could, drawing on source documents where possible.

“Across three separate papers we will release the detail on the six objections, starting with the first part which looks at the E&P Financial Group involvement…”

He says in the analysis “…we have just scratched the surface. There is so much more that needs to be unearthed, including what really went wrong at Dixon Advisory and how so much money was lost by clients in the E&P Financial Group’s US Masters Residential Property Fund. Getting to the bottom of this will only happen through a public inquiry. We are continuing to call for a public inquiry, and we ask for your support to achieve that.”

See more information on the CSLR and Dixon Advisory at the FAAA’s CSLR hub.



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2 COMMENTS

  1. It is the same story every time, where the Government and Regulators, who are out of their depth and totally reactive to scams and rip off's, wait till the proverbial hits the fan, then call for Legal eagles to save the day, the very profession that has caused so much of the losses by not cracking down sooner, then think that it is totally justifiable to make innocent Advisers pay the price for what the Government, the Regulators and all their Legal Council could not see, that was in plain sight.

    There are so many investigations once thousands of people's lives have been destroyed and the Governments response is to shut a gate once the horse has bolted, though don't have the foresight to see if there are other gates or holes in the fences, to stop this happening again and again.

    Many, many years ago, I spoke to a Senator whose role was to stop the spread of people losing their life savings.

    I gave him a solution that would not cost the Tax payer a cent and would solve most of the issues, then I asked him what group would you say has caused the most problems that has led to people losing their money.

    He said he did not know and I told him the Legal profession, which he was shocked by and said how could you possibly say that?

    I replied that NO-ONE in Australia has the foggiest idea what is going on and what to look out for, because the Legal profession has turned what should be a simple document with plain English pro's and con's explanations, into a maze of Legalize, no-one, including Lawyers themselves understands, which leads people to HOPE that what they are investing in, is good and will not bite them.

    His response was to thank me though what I have to realise, is that this is a very complex area, to which my reply was, did you not listen to what I just said?

    At which point he quickly exited and another Adviser who was listening, laughed and told me this Senator is a Lawyer, which of course made total sense.

  2. Daryl Dixon was editor of the AFR. Is that why there is no media on this scandal that is the same size as Storm?

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