Financial Advice Association Australia has called for a public inquiry into Dixon Advisory, the wealth management business that entered voluntary administration in 2022.

The association says the company’s collapse is potentially costing the financial advice profession $135 million through the industry-funded Compensation Scheme of Last Resort.

“How did things go so badly wrong? That is the question we want to get to the bottom of,” the FAAA said. “This is much more than just a few advisers providing poor advice. This is about an entire business that was focused on heavily selling in-house investment products … that turned out to be deeply flawed.”

Dixon Advisory entered administration in 2022 following a collapse in the value of a related-party product, the US Masters Residential Property Fund, and an influx of complaints, FAAA says.

The association says there are thousands of affected clients and many hundreds of millions of dollars in losses.

“It will have a substantial impact on the Compensation Scheme of Last Resort. Evidently, little has been done to get to the bottom of what really happened.”

The FAAA has written a paper to support its push for a public inquiry.

“There is no reason why what really happened at Dixon Advisory, and why so many Australians lost so much money, should remain such a tightly held secret,” the paper says.

“A public inquiry is essential to get to the bottom of this. There have been public inquiries in cases where the losses have been much less.”

The Australian Financial Complaints Authority said this month it expelled Dixon as a scheme member on June 30, meaning it will no longer accept new complaints about the business. 

However, AFCA is considering and finalising complaints received on or before June 29.

“Work is well under way, but it will take time to get through the large number of Dixon complaints,” the authority said.

AFCA has registered 2773 complaints against Dixon Advisory since the ombudsman’s inception on November 1 2018.

Click here for the FAAA paper.