Dixon Advisory fined $7.2m for breaches
Dixon Advisory and Superannuation Services (DASS) has been penalised $7.2 million by the Federal Court.
The Court found six representatives of DASS failed to act in clients' best interests and failed to provide advice appropriate to their clients' circumstances.
The Court found that on 53 occasions between October 2015 and May 2019, Dixon Advisory was the responsible licensee of six representatives who did not act in the best interests of eight clients when they advised these clients to acquire, roll-over or retain interests in the US Masters Residential Property Fund (URF) and URF-related products.
The Court found Dixon Advisory representatives failed to conduct a reasonable investigation of the clients’ circumstances before providing the advice. In some cases, this inappropriate advice resulted in the client’s self-managed superannuation fund (SMSF) being insufficiently diversified and exposed to risk of capital loss.
In handing down judgment, Justice McEvoy remarked: "There is no evidence that the (Dixon Advisory) representatives conducted the necessary reasonable investigations into the recommended financial products or any alternative financial products, nor is there evidence that they considered the personal circumstances of the clients.
"The contraventions were not the result of isolated or unauthorised conduct of the representatives. Six representatives committed the contraventions over a period spanning some three and a half years."
Dixon Advisory was also ordered to pay the Australian Securities and Investments Commission (ASIC) legal costs of $800,000 and, if it resumed providing financial services, it must have in place appropriate systems, policies and procedures to ensure its representatives act in the best interests of clients.
Dixon Advisory
AUTHOR
Laura Dew
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
