- Dixon Advisory has filed for voluntary administration as it comes close to its dark episode.
- Directors of Dixon Advisory identified that potential liabilities from regulatory penalties, class actions and settlements would result in insolvency at some time in future.
- Craig Crosbie and Stephen Longley (PwC partners) have been appointed as voluntary administrators.
35-year-old wealth management firm Dixon Advisory and Superannuation Services (DASS) had filed for voluntary administration as the company comes close to its dark episode.
Daryl Dixon, the pre-eminent pensions expert of Australia, and his wife Kate formed the company.
Why did Dixon Advisory file for voluntary administration?
The company faced damage due to class action filed by Shine Lawyers and Piper Alderman at the end of 2021. Dixon Advisory was alleged that the company failed to act in the interest of the clients as the investment committee pushed those financial products that generated millions in fees.
Australian Financial Complaints Authority (AFCA) was handling the clients' claims, and the value stood below $10 million. The company was able to handle the claims of AFCA alone. Still, the penalty of $7.2 million by the Australian Securities and Investment Commission (ASIC) has tipped Dixon Advisory over the edge.
Besides this, Dixon advisory was sued by a couple of clients seeking retirement advice and left the company with a liability of $900,000.
Directors of Dixon Advisory identified that potential liabilities from regulatory penalties, class actions and settlements would result in insolvency at some time in future.
E&P Financial Group role in voluntary administration
The parent company of Dixon Advisory, E&P Financial Group, released a statement on Wednesday stating that Craig Crosbie and Stephen Longley (PwC partners) have been appointed as voluntary administrators. Chief executive and managing director of E&P Financial, Peter Anderson, said that-
Anderson added that clients' assets are not at risk as they were bought under the name of the clients. Moreover, the staff will remain unaffected, and clients will access their advisers. Also, voluntary administrator appointments and claimants against Dixon Advisory do not impact the E&P Financial and internal funds.