Financial planners are up in arms about being forced to pay out tens of millions of dollars in compensation to victims of the conflict-riddled wealth management firm.
Dixon Advisory has been dead for more than two years. But the collapse of this conflict-riddled wealth management firm is causing more problems than ever for the financial planning industry, which is up in arms about the prospect of tipping in $130 million to bail out its victims.
In total, the financial planning sector may have to pay just shy of $130 million to compensate victims of Dixon Advisory. These claims may take years to be processed, meaning Dixon Advisory’s presence will be felt for a while yet.The additional burden is weighing on small advice firms that may employ several qualified financial planners who are subject to the levy.There is at least an end in sight.
A third source of outrage is the length of time the scheme allowed for making Dixon-related claims, and for the industry to be liable via levies.Financial planning groups say they are all in favour of a scheme which instils trust in the industry. But they feel dudded because this scheme was not meant to be retrospective but has proved to be exactly that.
However, that figure does not include the ramp up in Dixon claims evident in the Australian Financial Complaints Authority data from this year. The procedural lag means claims submitted before July 1, 2024, may not be processed until the following financial year.The government is paying very little while the planning industry has been left to fund an open-ended tail. It is bearing the burden because of the industry-pays funding model.
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