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Dixon Advisory hit with lawsuit over poor SMSF advice
Dixon Advisory is facing a lawsuit that could be the first of many after allegedly providing poor retirement advice for a couple’s SMSF, which left them $900,000 worse off.
Law firm Maurice Blackburn is representing Clare Nairn and Mark O’Toole in a lawsuit against Dixon Advisory over allegedly inappropriate super advice in regard to the couple’s SMSF, which left them around $900,000 worse off.
Craig Parrish, principal lawyer at Maurice Blackburn, confirmed that, according to the firm’s evidence, Dixon exposed the couple to financial harm for its own financial gain.
“Our clients placed their trust in Dixon Advisory as their professional advisers to help them plan for retirement in a balanced and measured way, and instead Dixon Advisory exposed our clients to a level of non-diversified and highly leveraged risk which they did not want nor need and invested them in products in which Dixon Advisory had a financial interest,” Mr Parrish said.
“Our evidence suggests that had Dixon recommended that our clients invest their super in a balanced portfolio over the same period, our clients would have been almost $900k better off today.”
This is the first one of these matters issued by Maurice Blackburn, but based on a number of client inquiries they’ve received, the firm is confident this will not be the last.
“We anticipate there are many others in a similar boat,” Mr Parrish said.
“Any clients of Dixon Advisory who believe the investments recommended to them may have been inappropriate for their goals and objectives, or performed below their reasonable expectations, are encouraged to contact us for further advice.”
In July this year, Dixon Advisory agreed to pay a $7.2 million penalty for breaches of the Corporations Act after the corporate regulator commenced civil proceedings against the firm for alleged conflicts.
ASIC’s proceedings relate to best interests duties under the Corporations Act, including allegations that Dixon Advisory representatives failed to act in their clients’ best interests to provide financial advice appropriate to the clients’ circumstances.
ASIC claimed that Dixon Advisory representatives knew or ought to have known that there was a conflict between their clients’ interests and the interests of entities associated with the Evans Dixon Group.
The regulator had also commenced proceedings in the Federal Court against Dixon Advisory in relation to alleged failures to act in the best interest of clients when providing investment advice to SMSF clients back in September last year.
This action relates to financial advice given to eight sample clients, who were advised to invest in the US Masters Residential Property Fund (URF) and URF-related products between 2 September 2015 and 31 May 2019, the corporate regulator said.
Tony Zhang
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.
AFSL Advisor - look mate most accountants stick to giving SMSF Advise. We ate the technicians in this space are are be hounded out. Just like we can do the maths on how much should I save up for etc etc. What astonishes me is haw fin planners are allowed to provide this advise and tax advise. I dont know what you are on about and all of he above complaint highlight that this is s turf war. I stick to accounting any day.0- Vertical sales?! And what’s CBus slogan and message?” We invest in property projects across the country, creating jobs for all of us.” Do you get the picture ? This is also a form of vertical sales but what’s even better the managers even tell you it’s for creating jobs for us! Thought it was clear that the purpose for Super is supposed to be only for 1 reason. But we all know that it’s not a level playing field
0 - No surprises here if you have had to try to help these poor clients that got screwed by Dixon’s.
An exceptionally clear case of why Product Owners should be separated from Advice providers.
Vertical integration yet again failing so badly.
Why did the RC & Hayne not address at all this massive problem of vertically integrated product & real advice ?
Had Hayne fixed this problem, so much of the BS over regulation could be much more easily cut away.0- Hear hear Vertical Sales Crap! This was the real problem not the actual advisors. But so many have thrown in the towel because of the new BS red-tape.0
- Vertical integration should definitely be outlawed. Except union finds as they operate outside the law.0
- I expect many more arrogant accountants either dodgy or out of their depth giving financial advice to face legal action. Where is ASIC?0
- The difference is accountants sell a service and do not need to sell product to be paid. Last time I checked the RC wasn't about the accounting "profession".0
- Doesn't mean there shouldn't be one. I've known dozens of clients who have been done over by investment decisions they did "on their own" after the accountant gave them the paperwork.0
- I agree there are bucket loads of Accountants giving illegal AFSL advice and ASIC has never busted 1 accountant.
The case here is Dixon’s Financial Advisers / AFSL Advisers, sure may have been both accountants and Advisers.
But it was the rubbish vertical product sales that caused the problems.
Mind you the cheaper SMSF accounting was a front for driving the vertical product sales.0
- We took on a client from this firm a while ago and it was clear what they did was not the right thing buy the client. In this case ASIC is doing a good job on what is expected of a regulator.
Faith in the system at last.0- Only issue is they took how many years? They were selling this rubbish direct via newspaper ads for years.0
- Sickening!0
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