Former E&P Financial Group chief executive Peter Anderson (left) and AFCA lead ombudsman for advice Shail Singh

More than 1900 investors who made complaints against failed advisory firm Dixon Advisory and Superannuation Services are a significant step closer to having them resolved after the complaints authority finalised a lead decision last week.

The Australian Financial Complaints Authority found Dixon Advisory, a wholly-owned subsidiary of E&P Financial Group, failed to provide appropriate financial advice and act in its clients’ best interests, that it prioritised its own interests ahead of its clients, and that by doing so it caused losses to an SMSF.

These findings, in a lead decision dated 6 February and published on its website on Thursday, will allow the speedier resolution of other complaints brought against the firm.

A lead decision sets out AFCA’s decisions and its reasons for those decisions on a range of issues that apply in relation to a specific complaint. It establishes the complaints body’s position on a number or relevant issues and where other clients have made complaints, and to the extent they touch on the same issues addressed in the lead decision, it will allow those complaints to be resolved more quickly than if each were considered individually.

In this case AFCA has determined that Dixon must pay the SMSF in question more than $254,000 plus interest. AFCA noted that a lead decision does not mean every complaint will have the same outcome.

In reaching its decision, AFCA said that Dixon failed to provide advice to the SMSF that fell within the risk parameters it had set. It didn’t adequately diversify the SMSF’s growth assets and left it overexposed to property, and it recommended too great a proportion of related-entity investments.

Those investments had more risk than the trustees of the SMSF needed or thought they were exposed to and were also more expensive than comparable products. AFCA said Dixon had “not established that it prioritised the complainant’s interest over its own”.

“But for the financial firm’s failure to provide appropriate advice and act in the complainant’s best interests, and had they not breached the Conflicts Priority Rule, the SMSF would have been $254,312.72 better off,” AFCA said.

“The advice was not appropriate for the complainant, nor in its best interests. The financial firm has not established that it has prioritised the complainant’s interests over its own in the provision of advice.”

Investors who believe that have a claim against Dixon have until at least 8 April 2024 to lodge a complaint with AFCA. Investors who lodge a complaint preserve their possible eligibility to recoup some or all of their losses under the Compensation Scheme of Last Resort.

Separately to its lead decision, AFCA revealed this week during Senate Estimates hearings that total claims against Dixon had reached $374 million and that it was reviewing all complaints to determine which of them fall within the scope of the CSLR.