It is disturbing that the advice profession faces another issue of this nature where at the core of the problem is a related party 'property' investment. The focus of action seems to be on the advice again, rather than the issues related to establishment and operations of the property investment. Why is there never enough focus on the product issues? It is also interesting to note that with UGC, they were only required to remain a member of AFCA for a year after they went into administration, compared to Dixon Advisory, which remained a member of AFCA for 2 years and 5 months after going into administration. With Dixon Advisory, ASIC stepped in to extend it for a further 12 months at one point. In response to a recent Question from Senate Estimates on this extension, ASIC provided the following response: "We have imposed such conditions on regular occasion—including in the case of DASS for a further year after its license cancellation—to preserve the rights of clients to make claims to AFCA. This is because complaints can only be made against entities which are AFCA members; if an entity’s AFCA membership ceases, no further complaints can be accepted by AFCA." Seems a bit arbitrary to me. We know that complaints can only be made as long as a firm is a member of AFCA, but leaving it open for so long is excessive, particularly after ASIC wrote to all of these Dixon Advisory clients in August 2022. There needs to be a standard approach to these matters, and just like clients having a 12 month deadline to submit a claim to the CSLR after receiving an AFCA determination, there should also be a 12 month window to make a complaint to AFCA after a business goes into administration. #faaa #fix CSLR
Paul Betti
5mo
In time with the current model of everytime a crooked adviser rips a client that other advisers are then required to carry the loss of these crooked advisers (ie the thieve from Dixon who then phoenix somewhere else) that in time we (good law abiding advisers) are now doing nothing but working to pay the wrong doings of these thieving advisers through Levys to ASIC (who should be protecting both law abiding consumers and advisers alike) Be aware.. the precendence has already been set (Dixon Advisory) and therefore it would be an injustice for other poor clients not to receive the same entitlements bestowed on the Dixon clients (regardless of the canberra cover up).. This needs to be fixed before it gets out of hand. I am of the view that wherever a compensation amount is levied, every adviser party to having created the levy should be removed from giving advice permanently. What is the point of having PI when we are being force to underwrite the losses. PI companies will be rubbing their hands together with the Dixon advisory model. Perhaps it is time for a class action. Im prepared to put in my financial share to right wrong..
Steve Blizard
5mo
It's a scam. No wonder advisers are still leaving in droves. Worse still, the levy really discriminates against part-time or semi retired advisers. We are so far from how this industry was in 1990, when there was some serious insurance business written. Now we have 3 life policies being cancelled for every 1 new policy written. It's a complete disaster.
The Government needs to immediately Legislate to make sure AFSL holders and Product Manufacturers cannot walk away from their responsibilities or find their PI is inadequate when a catastrophic failure occurs. It is not the responsibility of the financial adviser community to pick up the tab for Government failure to properly Legislate. Stephen Jones Hon. Luke Howarth MP
Nathan M.
5mo
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Managing Director of HPH Solutions, FPA Professional Practice of the Year 2020
5moThis CSLR situation is going to get so out of control. How can we accept such a situation where we pay Professional Indemnity Insurance for our own mistakes, pay to be a member of AFCA where we have no right of appeal against judgements, pay ASIC an Industry Funding Levy to regulate us and protect consumers, where any successful prosecution and resulting judgement revenue (fines, etc.) doesn’t offset the levy, and if ASIC miss the mark and consumers are out of pocket, we pay again! How did we get here?