Celebrity adviser Sam Henderson misled clients

Celebrity financial adviser Sam Henderson wrongly told clients he had a master’s degree in commerce.

Sam Henderson leaves the banking royal commission in Melbourne yesterday. Picture: AAP

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

In a litany of embarrassing revelations for the TV star and The Australian Financial Review columnist, the royal commission was given testimony by Fair Work Commission member Donna McKenna that Mr Henderson gave her “risible” advice that would have resulted in her immediately losing half a million dollars.

It heard one of Mr Henderson’s staff impersonated Ms McKenna six times during phone calls to obtain information from her super fund.

A subsequent investigation by the Financial Planning Association said the advice wouldn’t have been made if it were not for Mr Henderson’s conflicted interests. Ms McKenna’s complaint is yet to be finalised.

Mr Henderson, who runs Sydney planning shop Henderson Maxwell, appears on TV channels including Sky News Business, owned by The Australian’s publisher News Corp, and was a regular columnist for Fairfax Media’s The Australian Financial Review.

Last night, Mr Henderson was dumped by both organisations.

A spokeswoman for Sky News Business said Mr Henderson “no longer appears” on the channel, had not been paid for any appearance on Australian News Channel 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.

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

Ms McKenna, a former legal officer with the NSW Labor Council who was appointed from the NSW commission to the Fair Work Commission by Julia Gillard in 2009, said she met with Mr Henderson for the first time on November 7, 2016.

The meeting was dominated by talk of setting up a self-managed super fund, to be managed by Henderson Maxwell, she said.

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 at a second meeting, 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.

Mr Henderson was presented with evidence that his employees impersonated Ms McKenna multiple times when contacting SASS.

He also confirmed he previously held shares 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 accepted a suggestion by counsel assisting the commission, Rowena Orr QC, that 84 per cent was a high proportion of funds to be invested in one place.

In a 2016 guide for customers, Mr Henderson did not disclose that he had a financial interest in Managed Accounts Holdings, which he said was not “material”.

The guide also claimed he had a commerce master’s degree,

Ms Orr asked whether it was true that “at no point” had he attained this qualification. “It is and I apologise for that,” Mr Henderson said.

Ms McKenna said that at the first meeting, Mr Henderson also recommended that she tip $3000 a month into Henderson Maxwell investments and sell another investment, which Ms McKenna said was a term deposit unable to be sold at the time.

Asked by Ms Orr 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 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”.

She said Henderson Maxwell charged her $4950 for the advice.

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

Ms McKenna also complained to the Financial Planners Association — of which he was a member at the time — about the shoddy advice. “If someone with my educational and occupational background hits a wall when you endeavour to engage proper disciplinary processes — what hope are other people going to have?,” Ms McKenna said.

FPA professional accountability officer Mark Murphy investigated Mr Henderson. In emails tendered to the royal commission, Mr Henderson wrote that he thought Ms McKenna’s complaints were “a storm in a teacup” and asked that his response to her complaint was not shared with Ms McKenna.

Mr Murphy listed several areas where Mr Henderson had potentially breached the FPA’s code of ethics and said the member had “a case to answer”. He said there was “a strong and reasonable inference” Mr Henderson showed “a lack of objectivity” and put “his own interests above those of his clients” and would not have made such recommendations if it were not for his conflicts of interest.

Mr Henderson said he had no knowledge that an employee was impersonating Ms McKenna. He said he did not fire the employee.

“I wanted to terminate her employment. Instead we gave her a warning. It was border line. In hindsight, I should have followed my gut instinct to terminate her employment,” he said.