The Financial Advice Association Australia (FAAA) has been successful in its efforts for a public inquiry to be held into the collapse of Dixon Advisory, with the terms of reference based on its key areas of concern.
The association announced the inquiry would go ahead after a motion calling for an examination into the collapse and its potential impact on the Compensation Scheme of Last Resort (CSLR) was moved in the Senate and gained cross-parliament support.
The inquiry will be undertaken by the Senate Economic Committee and will address the causes of the collapse of the advice group, the role of the internally run US Masters Residential Property Fund, the actions of key individuals and the Australian Securities and Investments Commission, the impact of the administration and insolvency issues, and the potential implications for future advice matters.
The issues in the terms of reference have been key concerns for the FAAA, which has been engaged in a months long advocacy campaign for an inquiry, and its chief executive Sarah Abood thanked One Nation Senator Pauline Hanson for joining in those efforts and moving the motion in parliament for a probe.
“Today marks a major step forward for our profession and we want to thank Senator Hanson for her support in seeking transparency and for backing Australia’s small financial advice businesses in proposing this inquiry today,” Abood said.
“An inquiry is essential to understanding the full scope of what went wrong with Dixon Advisory – a scandal involving hundreds of millions in client losses – and to ensure it is not repeated.”
Efforts by the FAAA to secure an inquiry have included meetings with Treasury and Financial Services Minister Stephen Jones, as well as writing to all parliamentarians asking them to support the move after the association estimated compensation claims related to Dixon Advisory could reach $135 million.
“This inquiry is a crucial step forward in understanding what went wrong at Dixon Advisory and ensuring it can’t happen again. We look forward to working with and supporting the inquiry and to ensuring the CSLR is fairly and sustainably funded to support consumers into the future,” Abood said.
“The financial advice profession is made up of thousands of small businesses right across the country, helping Australians achieve their financial goals. We do not have the financial capacity to underwrite the misconduct of large companies and nor should we.”
