Banking royal commission: celebrity financial adviser Sam Henderson gave ‘risible’ advice on superannuation

Sam Henderson has been dumped by media outlets after inquiry hears he wrongly told clients he had a Master’s degree.

CEO and senior financial adviser at Henderson Maxwell Sam Henderson (right) arrives at the Federal Court in Melbourne. (AAP/Stefan Postles)

Celebrity financial adviser Sam Henderson wrongly told clients he had a Master’s degree in commerce, was found by the Financial Planning Association to put his “own interests above those of his clients”, and funnelled the majority of his clients into managed investment schemes in which he held shares, the banking royal commission has heard.

Fair Work Commission member Donna McKenna gave evidence to the royal commission that Mr Henderson gave her “risible” advice that would have resulted in her immediately losing half a million dollars.

Mr Henderson, who runs Sydney planning shop Henderson Maxwell, has been dumped from any future media appearances. A spokeswoman for Sky News Business (owned by The Australian’s publisher News Corp) said Mr Henderson “no longer appears” on the channel, had not been paid by Australian News Channel for any appearance and his last appearance was on Friday April 13 -- a day after he was summoned to the royal commission.

“We have no plans to run anything further from him,” a Fairfax spokesman said.

In a litany of embarrassing revelations, Mr Henderson was presented with evidence that his employees impersonated Ms McKenna multiple times when contacting her superannuation provider. Mr Henderson also confirmed he sold shares he personally held in the ASX-listed Managed Accounts Holdings, the company which administers the Henderson Maxwell managed discretionary accounts, into which 84 per cent of his clients’ funds under management was invested.

Mr Henderson said he did accept counsel assisting the commission, Rowena Orr’s suggestion that 84 per cent was a high proportion of funds to be invested in one managed account.

In the product disclosure statement, Mr Henderson did not disclose that he had a financial interest in the Managed Accounts Holdings. He said he didn’t believe it was a “material” stake in the company.

Mr Henderson, until January 2016, also listed that he had attained a Master’s degree in Commerce. Mr Orr asked whether it was true that “at no point” has he attained this qualification. “It is and I apologise for that,” Mr Henderson said.

Ms McKenna said she sought advice from Mr Henderson in late 2016 because she wanted to help her adult children and changes to super tax laws were looming.

“I had seen Sam Henderson on television,” she told the commission.

“He had a program on Sky Business television.

I had also read articles in the Australian Financial Review and other publications such as Money Magazine.”

She said her first meeting with Mr Henderson on November 7, 2016, was dominated by talk setting up a self managed super fund, to be managed by Henderson Maxwell.

“It was to be one of the largest slabs of conversation we had at the meeting,” Ms McKenna told the commission.

“Mr Henderson persisted in promoting a self managed super fund with Henderson Maxwell’s involvement”.

Screen grab of Fair Work Commissioner Donna McKenna giving evidence at the financial services royal commission in Melbourne today.

She said she resisted Mr Henderson’s continued spruiking of the idea, but eventually agreed to consider it, telling him: “There is some secret financial planner’s business about having a self managed super fund, you can put it in your advice and I will consider it.”

Mr Henderson also asked her to consider investing in funds managed by Henderson Maxwell, pointing out that the firm had recently won an international financial planning award and the 2016 Association of Financial Advisers award for practice of the year.

She said that a second meeting on December 14, Mr Henderson provided her with a statement of advice, ready to be signed, recommending she shut her State Authorities Superannuation Scheme fund and transfer the balance into a SMSF managed by Henderson Maxwell.

This would have cost her $500,000 — the difference between an early withdrawal and waiting until retirement.

June 26, 2014

Royal Commission timeline

The Senate economics committee calls for a royal commission following a lengthy inquiry into ASIC’s performance that focused on financial planning scandals at the CBA.

April 21, 2016

Royal Commission timeline

In an attempt to stave off continuing calls for a royal commission, the Australian Bankers Association announces former senior public servant Ian McPhee will oversee an overhaul of industry standards and practices.

November 30, 2017

Royal Commission timeline

After years of denying a royal commission is needed, the banks write to Prime Minister Malcolm Turnbull asking for one. He obliges.

February 12, 2018

Royal Commission timeline

Commissioner Kenneth Hayne formally opens the inquiry and sets the tone by laying into the big banks for failing to provide all the information he wanted in time.

March 13, 2018

Royal Commission timeline

The commission’s first full public hearings hear about consumer credit issues including a home loan fraud ring among NAB bankers in Western Sydney and out-of-control mortgage brokers at CBA subsidiary Aussie Home Loans.

April 16, 2018

Royal Commission timeline

Second round of hearings kicks off with a focus on one of the industry’s most scandal-prone sectors, financial planning.

“After Mr Henderson had got the overhead projector working he said to me words to the effect: ‘We’ve had a good look at this and we recommend you should set up a self managed super fund and buy property using a limited recourse loan and that you should have Henderson Maxwell Investments, we’ll be looking after it for you.’”

He recommended that she tip $3,000 a month into Henderson Maxwell investments and sell another investment.

“That particular investment had obviously not been examined, because it was in the nature of a term deposit, which could not obviously be sold down at that point in time,” Ms McKenna said.

Asked by counsel assisting the commission, Rowena Orr, QC, what she thought of the advice, Ms McKenna said: “I thought they were risible.”

She said she asked Mr Henderson why she would do as he suggested when she was currently in “secure low-cost industry type funds”.

“Mr Henderson said: ‘I don’t have much time, I’ve got a Christmas cocktail function I’ve got to go to.’”

The entire meeting was over in 10 to 15 minutes, she said.

“I can remember saying to my son: ‘I can’t believe this. I’ve been to see the financial planner of the year and this is what you get.’”

She said she was disappointed because she had hoped that by going to an independent planner “I wouldn’t be subject to product flogging of the type associated with the big banks”. “The advice was so poor that I all but threw the advice in the bin at that stage,” she said.

She said Henderson Maxwell charged her $4,950 for the advice.

He said Mr Henderson admitted that the advice was “clearly templated, rushed” and “inadequate” and refunded her.

She also complained to the Financial Planners Association — of which he was a member at the time — about the shoddy advice.

A customer service representative at Sam Henderson’s practice, Henderson Maxwell, also impersonated Donna McKenna in a telephone call to her super fund, the banking royal commission heard.

The staff member was not sacked, Mr Henderson told the commission.

“It was borderline.”