Anything and Everything about Superannuation

Discussion in 'Superannuation, SMSF & Personal Insurance' started by trinity168, 15th Feb, 2017.

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  1. SatayKing

    SatayKing Well-Known Member

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    OK then. But the publication refers only to policies and not breaching any legislation. So it might be unethical but not illegal I gather.

    "An ASIC surveillance about personal investment switching by directors and senior executives of superannuation trustees has identified concerns with trustees’ management of conflicts of interest.

    ASIC looked at a sample of 23 trustees (including trustees of industry and retail funds), and focused on conduct during the time of increased market volatility arising from the COVID-19 pandemic."

    21-282MR Surveillance of investment switching by super fund executives identifies concerns with trustees’ conflicts arrangements | ASIC - Australian Securities and Investments Commission
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    This a APRA concern for corporate governanance and the prudential safeguards as a Director must always act for the interest of the members before all else. They may be required to abstain from voting, declare a conflict or even be absent from the discussion. They certainly shouldnt be selling down or switching personal investment choices armed with their privy information. Board Minutes etc are a key element to see what discussion and actions took place to manage these issues. As seen - Not a lot in some instances.

    Some funds embargo specific employees and trustees from changes to their investment mix. The trustee may need to "consider" their request to avert such conflicts. rather thasn allowing certain members to make their own choices without oversight.

    It is a breach of the Corporation Act and regulations and is "illegal". The question is what degree of harm is involved ? It is a failure to evidence the safeguards rather than bypassing or ignoring them etc ? The COVID period was a time when trustee members where privy to the board information concerning assets write downs which often reflect several days or weeks later into member values. These director members acted to rollover or switch funds prior to the fund taking those losses. Its akin to insider trading.

    To be honest a % of total funds under management the issue is a very immaterial matter in dollar terms and the fund loss is likely unaffected. No member was likely materially harmed as the per member impact may be rounded to "cents" of a typical member balance BUT it was a exploitation of personal position and does call to question the board and its trustee members judgement and their acts. This is likely why ASIC raised a concern rather than a penalty etc. Name and shame may be more effective to change behavious and put all funds on notice to improve governance. It may be a costly and complex mater to litigate. A learning experience to improve issues for the future.
     
  3. ChrisP73

    ChrisP73 Well-Known Member

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  4. SatayKing

    SatayKing Well-Known Member

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    Make sure you can get your hands on the Trust Deed. While it was a Family Trust, I'm guessing it could also apply to an SMSF Trust Deed or any other Trust.

    "Declarations and orders

    139 The Court declares that:

    (a) the Mantovani Family Trust has failed for uncertainty due to the loss of the trust deed;

    (b) Vanta Pty Ltd holds all of the Family Trust’s property, rights and assets acquired by it as trustee of the Family Trust subject to a resulting trust for the estate of Teresa Mantovani; and

    (c) Vanta Pty Ltd holds any further income arising from the assets of the Family Trust on the same resulting trust or trusts."


    Mantovani v Vanta Pty Ltd (No 2) [2021] VSC 771 (25 November 2021)
     
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  5. Tony3008

    Tony3008 Well-Known Member

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    Only delayed - apparently advising people to put their entire super funds into one adviser-linked fund wasn't a good idea:

    Dixon Advisory files for voluntary administration


    SMSF services provider Dixon Advisory has filed for voluntary administration, with the company facing an increasing number of claims and potential liabilities.

    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.


    When I first came here from UK and needed to transfer my super, their full page ads were everywhere, offering the services of two kindly old gents or their young attractive sidekick. Cynic that I am I reckoned that my modest balance would probably get me a 25-year old grad trainee so went elsewhere. Thankfully. Tragic for those who have seen super balances trashed with no real way back.
     
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  6. Noobieboy

    Noobieboy Well-Known Member

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    Don’t think the actual funds have been trashed unless they provided incorrect advice and people acted on incorrect advice. Super funds are held in trust for a reason. Let me know if I’m incorrect.

     
  7. Mark F

    Mark F Well-Known Member

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    Darryl Dixon was the "guru" of pensions consulted by all and sundry when I moved to Canberra in the mid 1990s. It seems that since then the younger members have "branched out" and come unstuck. I got into investing and smsfs though a very cheap three session course run by Darryl for ANU continuing education. Best $165 I ever spent.
     
  8. SatayKing

    SatayKing Well-Known Member

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    It would seem so. @Isla_Nublar reported in the LIC 2022 thread Dixon's is no more or soon to be.

    Given the article below, although it relates to fraud (is poor advice fraudulent in a moral sense?), it appears the Courts may be the only avenue for SMSF's to try and recover some of the funds lost no matter how they are lost.

    SMSF's hung out to dry - MWJ
     
  9. SatayKing

    SatayKing Well-Known Member

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    Oh they lost funds alright. One case

    Canberra couple who switched supers say they're $300,000 worse off

    I have heard some lost $900k. I think E&P are referring to current not past funds being at risk.
     
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  10. Noobieboy

    Noobieboy Well-Known Member

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    Cheers. So they lost money because they acted on advice and their investments didn’t perform? I’m just trying to establish if it was because of a horrible investment … not embezzlement or the company dipping into peoples funds. Is that right line of thought?


     
  11. SatayKing

    SatayKing Well-Known Member

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    It was a trash investment. URB which was a listed fund investing in residential real estate in the US. Managed by Alan Dixon who subsequently resigned as the product was going deep South, stepped aside from Dixon advisory, sold up for about $20m and disappeared somewhere in Florida or the deep South just like URB did. Don't know if he has been found yet.

    I know, I know. We can throw brickbats at the trustees of the SMSF for simply taking and acting on the advice but many seem to think they are obliged to follow that advice. After all, in their view it was provided by an FP and the clients would have assumed it was given in good faith.
     
  12. Nodrog

    Nodrog Well-Known Member

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    I was very happy with Daryl Dixon back then as well. A small advisory firm offering great advice in the best interest of the client. But that changed sadly for the worse quite some years ago.
     
  13. Nodrog

    Nodrog Well-Known Member

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    No doubt Peter Thornhill will add that to his list of why to avoid real estate rant:D. Won't get any disagreement from me.

    iu.gif
     
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  14. SatayKing

    SatayKing Well-Known Member

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    See LIC 2022 thread. ;)
     
  15. Ross Forrester

    Ross Forrester Well-Known Member

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    I think Dixon advisory were good when they were an independent tax and administration advisors. When they branched out into promoting investments and insurance they went downhill. The temptation to do something dodgy when you control both arms is massive. The law now still doesn’t stop blokes with self interest like Dixon doing what they did. Disclosure is not enough - avoiding is needed.
     
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  16. SatayKing

    SatayKing Well-Known Member

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    He's looking dishevelled as of late.

    Daryl Dixon.png
     
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  17. SatayKing

    SatayKing Well-Known Member

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    Pity the timing didn't apply to the clients.

    "On the afternoon of August 27, noted Quentin Tarantino fan and Dixon Advisory scion Alan Dixon dumped every single share he held in the troubled amalgam of Evans & Partners and Dixon Advisory he helped float only two years ago. By the morning of September 4, ASIC filed notice it was commencing civil action against Dixon Advisory, for allegedly failing to act in its clients’ best interests.

    Eight days separate those two events. Marvellously good timing for Dixon, if not for poor old Tony Pitt at 360 Capital, now the largest shareholder, who gobbled up every single one of the shares dumped by Dixon and his private company, Mr Orange Pty Ltd, for $18.6 million."

    Lucky Alan Dixon cashes out of Dixon Advisory

    Edit: URF was the fund not URB
     
    Last edited: 22nd Jan, 2022
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  18. SatayKing

    SatayKing Well-Known Member

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    Always turn something conceptually simple into something more complicated.

    "The federal government’s Mid-Year Economic and Fiscal Outlook (MYEFO) has included a fix for legacy pension issues that arise when a new market-linked pension creates a transfer balance cap breach for the income stream recipient.

    According to actuarial firm Accurium, the problem has arisen from circumstances where a new market-linked pension has been commenced after the full commutation of a lifetime complying pension, a life expectancy pension or a pre-1 July 2017 market-linked pension.

    The firm added to this end the current rules dictate the new market-linked pension must be commenced at the current value of the income stream’s supporting assets and should this value exceed the recipient’s transfer balance cap, the excess will exist in perpetuity as a market-linked pension is not commutable."

    Govt puts legacy pension fix on table - SMS Magazine
     
  19. SatayKing

    SatayKing Well-Known Member

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    No doubt many are aware of the increase in the balance cap from $1.6m to $1.7m.

    However, as a result of the indexation it means individuals will now have a personal transfer balance cap between those amounts and no single TBC will apply to everybody. The personal indexed amount is calculated proportionally based on the remainder of the cap as at 1 July 2021.

    Hmm, does this mean this has happened?

     
  20. Piston_Broke

    Piston_Broke Well-Known Member

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    There's a technical term for that: "Baffle them with BS".

    Back in the 90s I thought most of these super advisers and sales people were running scams to fleece the ignorant. Now I'm sure they were.

    Yesterday I seen AMP on the news.... I remember when they floated, $20, $22 I think the got to $26 and everyone thought they won the lottery.
    Many people asked me about amp, but never a second time as i told them it's worthless.
     
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