Dixon Advisory: What to do if you've lost money

When people seek financial advice, they invest their trust, and often significant savings, in the expertise of the adviser. They expect that not only will the adviser make decisions to maximise returns on investments, but also that they will act in the best interests of their client.

This includes clear communication and agreement of the level of risk needed to achieve the goals of the investments.

Recently, a case against Dixon Advisory and Superannuation Services (Dixon Advisory) have shown misconduct leading to substantial losses for many investors.

The Australian Financial Complaints Authority (AFCA) has made a significant lead decision, finding Dixon Advisory guilty of failing to provide appropriate financial advice and prioritising its own interests over those of its clients.

Key Takeaways from the AFCA Decision:

1. Dixon Advisory failed to provide suitable financial advice, leading losses for a self-managed superannuation fund (SMSF), exceeding $254,000.
2. This decision means that 4,500 former Dixon Advisory clients may be able to make claims for compensation.
3. Around 2,000 clients have already lodged complaints with AFCA, but the remaining 2,500 clients have not.
4. The deadline for lodging complaints with AFCA is unknown. AFCA has confirmed that Dixon Advisory has not yet cancelled its AFCA membership, so former clients who have suffered losses are still eligible to lodge complaints. This is important to potentially receive compensation through the Compensation Scheme of Last Resort (CSLR).

Understanding Your Options if you were a Dixon Advisory Client

If you are a former client of Dixon Advisory and you have suffered a loss in your investment fund, you must act quickly to protect your rights.

It's essential that affected clients take action quickly.

Here's what you need to do:

1. Lodge a Complaint with AFCA: If you haven't already done so, we urge you to lodge a complaint with AFCA. This step is essential to ensure you are eligible for potential compensation under the CSLR.
   
   
2. Review Your Case: If you've already lodged a complaint with AFCA, it's important to review the lead decision against Dixon Advisory and assess how it applies to your case. Gathering key documents and evidence to support your claim is very important for a successful outcome.
   
   
3. Seek Independent Advice: Before making any decisions, such as winding up your SMSF, it's important to seek independent financial and legal advice. Winding up your SMSF could impact your claim with AFCA, and your eligibility for compensation under the CSLR.

Understanding the Compensation Scheme of Last Resort (CSLR)

The CSLR provides a lifeline for consumers whose financial firms have failed to pay compensation as part of AFCA decisions. This is likely to be the case for Dixon Advisory. Here's what you need to know about the CSLR:

1. Eligibility: To be eligible for compensation under the CSLR, you must meet specific criteria including having an AFCA determination in your favour, and notifying AFCA within 12 months of the determination that it has not been paid, and making an application to the CSLR for compensation.
2. Compensation Cap: The CSLR offers compensation of up to $150,000 per claim. Any amount exceeding this cap remains a debt owed by the relevant entity (the advisers) to the consumer.
3. The DASS class action:  Its important to get legal advice about how any settlement of this action being run through the Federal Court of Australia may impact your rights to access the CSLR.
4. Act Now: With the deadline for lodging complaints unknown, it's essential to take action now to preserve your rights and maximize your chances of receiving compensation.

How we can help

At Maurice Blackburn, we are committed to helping victims of financial misconduct seek justice and recover their losses.

We act ‘no win no fee’ basis to support you through the entire process.  This includes support for expert reports and other expenses that may be necessary to gather evidence and strengthen your case.

Our team of experienced lawyers specialise in financial advice disputes and will guide you through every step of the claims process.