ASIC Seeking Millions from Dixon Advisory
ASIC initiates legal proceedings against Dixon Advisory, alleging conflicts of interest, failure to act in clients’ best interests, and inappropriate advice. The case involves instances of financial advice resulting in contraventions of ‘best interest duties’. ASIC seeks declarations, financial penalties, and compliance measures against Dixon Advisory.
The Australian Securities and Investment Commission, ASIC, has commenced proceedings in the Federal Court of Australia against Dixon Advisory. ASIC alleges that Dixon Advisory representatives ignored conflicts, failed to act in their client’s best interest and provided inappropriate advice.
From September 2015 to May 2019, 51 instances of financial advice were provided to eight sample clients. ASIC found “each of which resulted in two or more contraventions of ‘best interest duties’ under the Corporations Act”.
Dixon Advisory clients were advised to invest in the US Masters Residential Property Fund (URF) and URF-related products. Established in 2011 by Evans Dixon, the parent company of Dixon Advisory, URF is an ASX-listed property fund that gives investors exposure to the US residential property market.
The Financial Review reported that, since its conception, the fund has paid an estimated $236 million in fees to Dixon Advisory and other Evans Dixon companies. ASIC wrote on the matter that Dixon Advisory “either knew or ought to have known about the conflict of interest” between their clients and the Evans Dixon group. They later commented that “Dixon Advisory representatives failed to prioritise their client’s interests”.
ASIC is seeking declarations of contraventions and financial penalties against Dixon Advisory. The maximum civil penalty for contraventions alleged against Dixon Advisory is $1 million per contravention prior to 13 March 2019. Afterwards, a penalty of $10.5 million applies per contravention.
In addition to the penalty, ASIC is also seeking orders that Dixon Advisory:
- put in place appropriate systems, policies and procedures to ensure that Dixon Advisory representatives comply with best interests’ obligations; and
- provide a written report from an independent expert confirming this compliance.
If you’re questioning the advice you received from a financial advisor and are thinking about taking steps against them, contact us. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial matters. You can contact us online, call us at 1300 433 533 or email us at enquiry@fdlegal.com.au.
