Banking Royal Commission: Finance boss collapses under questioning
THE under-siege owner of the Dover financial advice group collapsed in the stand at the finance royal commission moments after being warned his company could be breaking the law.
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THE under-siege owner of the Dover financial advice group collapsed in the stand at the finance royal commission moments after being warned his company could be breaking the law.
Dover co-manager and owner Terry McMaster collapsed just before 4pm on Thursday, less than a minute after commissioner Ken Hayne warned him a so-called “customer protection policy” that attempted to exonerate Dover for a raft of responsibilities to customers could breach corporate rules.
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Counsel assisting the commission Mark Costello then resumed, saying Dover had a policy of fighting client complaints “at all cost”, to which Mr McMaster disagreed.
Mr McMaster started hyperventilating and slumped in his seat. The courtroom was cleared and an ambulance called before he was wheeled out of the Federal Court to a waiting ambulance soon after.
Earlier in the hearing, Mr Costello, had cornered the Dover owner over the problem “customer protection policy”.
“This document is nothing more than an elaborate attempt to exclude Dover’s liability for the acts of its authorised representatives? Do you agree with that,” Mr Costello asked.
After being pressed that the customer protection form offered no customer protection at all Mr McMaster agreed, saying the title of the document was a “misnomer”.
“I put it to you it is Orwellian to describe this as a client protection policy,” Mr Costello said, which Mr McMaster agreed to as well.
Dover’s website reveals it changed the policy in March this year after being contacted by the Australian Securities and Investments Commission.
Mr McMaster had earlier been defending Dover’s hiring policies before the Royal Commission after it was shown it had picked up a series of problem planners from the likes of AMP, ANZ and Westpac.
It was revealed Mr McMaster was hiring adviser Julie Hamilton from the Financial Wisdom company when she was already under investigation for problematic advice. She was later banned for three years by the corporate cop.
DOVER TURNED DOWN BANKING COMMISSION REQUEST
It was also revealed earlier in the day that Dover financial turned down its initial invite to appear at the Royal Commission with Mr McMaster saying he thought it wasn’t “mandatory”.
Mr Costello said Dover was the only large scale advice body to turn down the request from the commission.
Mr McMaster is one of the three managers of the business and the sole owner of Dover.
“We took it as not in any way mandatory,” Mr McMaster said of the invite.
The commission was adjourned for the day and returns tomorrow.
FPA TRIED TO KEEP CELEB ADVISER FINDINGS SECRET
A peak body representing financial planners tried to keep its investigation of “damning” allegations against high-profile adviser Sam Henderson secret, including trying to avoid “publication by the Royal Commission”, the commission heard this morning.
At the same time, it was revealed the Financial Planning Association of Australia ignored its own investigator’s “damning” recommendation against Mr Henderson over advice that would have lost a client half a million dollars.
Counsel assisting the commission Rowena Orr, QC, showed a confidential FPA document which showed it was worried about things such as negative publicity for Mr Henderson despite the serious allegations against him.
“It is an ongoing matter, and again the FPA asks that the matter be treated confidentially as any publication by the Royal Commission identifying Mr Henderson would render the conduct review committee process worthless to Mr Henderson, undermine the process of the conduct review commission and damage the FPA’s relationship with other members,” the email said.
Under questioning, FPA chief Dante De Gori said Mr Henderson was “uncooperative” over an investigation into his advice, offered to his former client Donna McKenna.
Mr De Gori acknowledged the inquiry into the advice had now stretched out to over a year.
It was revealed on Tuesday that Mr Henderson’s advice would have seen Ms McKenna lose $500,000 in superannuation.
It was also revealed a person from Mr Henderson’s office also impersonated Ms McKenna on the phone to her super fund to find out basic details.
Ms Orr said the internal FPA report was “damning”.
But instead of throwing the book at Mr Henderson for what the FPA’s own report said was his “lack of objectivity “or a “conscious decision to place his own interests before those of the client”, the final decision over Mr Henderson’s fate was handed to committee at the FPA.
The watered-down recommendation to that committee instead recommended things like making Mr Henderson pay his overdue member ship fees and do more staff training.
That new recommendation also said he had to get an independent person to review his business practices but also that the findings be kept secret from the public.
The committee is yet to make a decision on this different course of action, but Mr De Gori insisted it was “imminent”.
Ms Orr also pointed out that the harshest penalty available to the FPA was expulsion, but that was not pursued with Mr Henderson.
Mr Henderson has had regular media appearances on Sky Business, Nine’s Today Show and Ten’s The Project and has written for the Australian Financial Review.
Mr De Gori said he had appeared on Sky Business as a guest of Mr Henderson and had Mr Henderson MC events for the FPA.
Mr De Gori said he did not know why the FPA tried to keep the findings against Mr Henderson secret and it was not protecting members above the interests of financial services customers.
“I’m not aware how that particular component got into the final terms. It could be possible that Mr Henderson requested it.”
Ms Orr, said the FPA investigation starved Ms McKenna of updates and told her she would not be able to advocate her case before the FPA review committee.
Mr De Gori acknowledged he had received a letter from Mr Henderson describing Ms McKenna’s complaints to the FPA as “aggressive and nitpicking”.
After that, Mr Henderson then asked the FPA not to tell her of his harsh description of her.
Mr De Gori denied this is why that submission to the FPA was not passed to Ms McKenna.
Mr De Gori said that while the FPA’s committee can expel members but he said the organisation had no power to stop people from practising in the industry.
Mr De Gori said five member have been expelled in the last half decade.
It was revealed the conduct review commission has made 18 determinations in the last five years but seven of these were kept secret.
“Don’t the public have a right to know (if planners) have breached your policies, codes and procedures,” Ms Orr said.
The FPA says it has over 13,000 members with 11,400 are said to be practising financial planners.
They label themselves the “leading professional community of financial planners”.
Mr De Gori would not say financial planning is a fully fledged profession like a doctor or lawyer, only confirming he thought it was an “emerging” profession.
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