In an ASX announcement, Dixon Advisory and Superannuation Services (DASS), a wholly owned subsidiary of E&P Financial Group Limited, announced it had appointed PwC partners, Stephen Longley and Craig Crosbie, as voluntary administrators.
The directors of DASS determined the company would likely become insolvent at some future time due to “mounting actual and potential liabilities”, including legal proceedings, claims being determined by the Australian Financial Complaints Authority and regulatory penalties.
In November last year, law firm Piper Alderman filed a class action against Dixon Advisory over allegations the company provided conflicting advice to SMSF clients.
A lawsuit was also filed against Dixon Advisory in October by a couple alleging that the company had provided inappropriate superannuation advice to their SMSF.
In July, Dixon Advisory entered a conditional agreement with ASIC, agreeing to pay $7.2 million to resolve civil penalty proceedings. The proceedings commenced by ASIC related to allegations that Dixon Advisory representatives failed to act in their clients’ best interests to provide financial advice appropriate to the clients’ circumstances.
Following the appointment of voluntary administrators of DASS, E&P Financial Group said it is aiming to facilitate the prompt transfer of DASS clients to a replacement service provider of the client’s choice with minimal disruption to client service.
It will also propose a deed of company arrangement (DOCA) that provides for the comprehensive settlement of all DASS and related claims, including the representative proceedings, in a manner that provides for equitable treatment of all DASS clients or creditors.
E&P Financial Group stressed that the voluntary administration relates to DASS only and that no client assets are at risk.
The company also assured that there would be no staff impact as a result of the voluntary administration, with DASS clients still having continued access to their current advisers.
“There will be minimal disruption to client service while clients are supported through the transition to a replacement service provider of their choice,” the statement said.
E&P Financial Group managing director Peter Anderson said the appointment of voluntary administrators to DASS has become necessary in light of the “increasing number of claims against DASS and the potential associated financial liabilities”.
“It has also become apparent that settling individual claims as they arise will likely lead to inequities between client creditors. Voluntary administration provides an appropriate framework to ensure all client creditors are treated equitably,” said Mr Anderson.
“Importantly, no client assets are at risk as a result of this process, and we will strive to minimise any disruption to clients who will have ongoing access to their adviser.”
