Thousands of investors in the ACT are understood to be affected by the announcement on Wednesday that the fourth largest self-managed super fund in Australia, Dixon Advisory, has gone into voluntary administration as a result of increasing claims against the company.
The "wealth management" company had been formed in Canberra more than 35 years ago by respected, high-profile pensions expert Daryl Dixon.
The company said in a statement that the directors of Dixon Advisory and Superannuation Services (DASS) - a wholly-owned subsidiary of the E&P (Evans and Partners) Financial Group - "determined that mounting and actual potential liabilities mean it is likely to become insolvent at some future time".
"No client assets are at risk ... as a result of this process," the company said in a statement to the ASX.
The corporate liabilities result from a class action launched late last year by commercial law firm Piper Alderman, which accused the company of deceptive and misleading conduct, and that it failed to act in the best interests of its clients.
The class action alleged that Dixon Advisory's investment committee approved and recommended products which were "pushed on" clients. These products served to pour millions of dollars of fees into the company.
The insolvency comes after Dixon Advisory was embroiled in a raft of controversy. In July last year, the company was forced to pay $7.2 million penalty for breaches of the Corporations Act as well as $1 million to cover the Australian Securities and Investments Commission's costs of its investigation and legal proceedings.
Then another law firm, Maurice Blackburn, lodged a lawsuit against the company on behalf of clients for allegedly poor super advice.
Dixon Advisory had been founded in Canberra in 1986 on providing trusted and sound superannuation and pension plan advice, its sign prominent on Northbourne Avenue. Both Daryl Dixon and his son, Alan, had been on the investment committee until 2019.
One of the more speculative investments by the company had been large volumes of real estate in New Jersey and New York under the US Masters Residential Fund, in which the would buy property, renovate and flip it back onto the market.
In its statement to the ASX on Wednesday, the company said it had appointed PricewaterhouseCoopers Partners as its liquidator and would "facilitate a prompt transfer of DASS clients to a replacement service provider".
