Disgraced planner Henderson fined $10,000

Disgraced celebrity financial planner Sam Henderson has been fined $10,000 for misrepresenting his qualifications over several years.

Former celebrity financial planner Sam Henderson on Tuesday. Picture: Monique Harmer

Disgraced celebrity financial planner Sam Henderson has been fined $10,000 after being convicted for misrepresenting his qualifications over several years.

The three charges on which Henderson was found guilty in the NSW District Court on Tuesday mark the end of an era for the celebrity financial planner but far less than the maximum penalty of 10 years’ imprisonment or significant fines totalling upwards of $80,000.

The $10,000 hit, coupled with a two-year good behaviour order, marks the closure of the first court action arising from his appearance before the royal commission into financial misconduct in 2018.

The court found Henderson breached the Corporations Act in 2014 and 2016 by giving at least two clients a financial services guide that suggested he had a Masters of Commerce (financial planning) when he did not.

Corporate regulator ASIC also alleged that Henderson stated he held a Master of Commerce in a series of PowerPoint presentations, on his website and in brochures between 2010 and 2017.

Henderson had never completed the Masters of Commerce degree, which he started studying at Western Sydney University, despite spruiking in books, PowerPoint presentations and interviews that he held the degree.

Henderson’s barrister contended that despite the incorrect statement of information there had been no harm to the named victims.

He noted that Henderson had already been punished, adding that Henderson had told his lawyer “he will never work in the financial services industry again”.

Magistrate Jennifer Atkinson, when sentencing Henderson, noted his early guilty pleas and took into account the likely financial penalty from ASIC, which had written to him outlining they intended to recover $126,066.87 in costs for investigating him.

Magistrate Atkinson said despite the suggestion he had done no harm there was considerable and repeated evidence that Henderson had not corrected the record when he had a chance.

“Financial services professionals are in a specific position, people rely on their advice and while here is no evidence that anyone suffered any loss, people consider what is in marketing material financials services guides when they consider how they are going to choose as their advisers,” Magistrate Atkinson said.

“Among that information is information about the person’s various qualifications — that information needs to be correct.”

Seated in court in his black suit next to his new wife, Henderson rose to fame through numerous TV appearances as a financial advice commentator.

Henderson first made headlines after he was reported to the 2018 the royal commission by Fair Work Commissioner Donna McKenna, who made a complaint alleging he had provided her financial advice that could have seen her lose $500,000.

Ms McKenna has closely followed Henderson’s case, appearing at several of his hearings and the day of his sentencing.

Fair Work Commissioner Donna McKenna attended Sam Henderson's sentencing at the Downing Centre on Tuesday. Picture: NCA NewsWire/Monique Harmer

At the time of the royal commission, she said Henderson’s advice was “risible” and concerned her so greatly she reported him to the Financial Planning Association after being offered a refund by Henderson for the paucity of his advice.

“I considered it was my public duty to provide assistance to the royal commission,” Ms McKenna told the commission.

The commission heard the FPA had written to the royal commission urging that Sam Henderson’s name be “treated confidentially” noting publication of his name would “cause significant damage to the reputation of Mr Henderson”.

The commission heard allegations that Henderson had directed staff at his financial planning firm, Henderson Maxwell, to impersonate clients on calls to their super funds.

In a recording played to the commission, Henderson Maxwell’s staff gave Ms Mckenna’s membership number and is referred to by the State Authorities Scheme representative as ‘Donna’.

During the recording played to the commission the employee of Henderson Maxwell put the call on hold.

When quizzed about the incident at the royal commission Henderson said he could not recall if he spoke with the staff member during the time the call was on hold.

“Potentially, but I can’t answer with any certainty,” he said.

But when speaking on the specialist financial advice podcast XY, Henderson said he was told it was a common practice by many in the industry to impersonate clients on calls.

“The staff member should not have done what she did and in no way do I endorse that. But the number of people who tell me it is or was common practice is unbelievable,” he said.

Tuesday’s court decision comes after Henderson was ultimately fined $50,000 by the FPA and found in breach of nine of the 10 allegations put against him.

In 2019, he was also disqualified from running a company by ASIC for three years.

Henderson, who started his wealth management firm Henderson Maxwell in 2004, was once a high flyer of Sydney’s money management scene, but his sentencing marks the nadir of a career that saw him appear regularly in Nine newspapers The Sydney Morning Herald and the Australian Financial Review, and at Nine’s television station on the Today Show, as well as spots on Sky Business.

His firm was even named Practice of the Year at the 2016 Association of Financial Advisers awards ceremony.

Henderson was set to walk away with almost $11.6m as part of a sale of his firm to AZ Next Generation in 2017.

But his public fall before the royal commission and the emergence of the alleged illegal conduct of staff at the firm saw the deal torpedoed.

The deal was subject to an earn-out coupled with an upfront cash payment, which The Australian understands would have typically taken place over 10 years.

With the findings against Henderson, the financial management firm was now rudderless and was subsumed into another financial planner owned by AZ Next Generation, Pride Advice and Accounting

No staff who were at Henderson Maxwell during the time when the conduct on which Henderson appeared before the royal commission took place now work at Pride.

The Australian understands AZ Next Generation did not attempt to claw back any of the money already paid to Henderson for Henderson Maxwell despite the sudden collapse of the business so soon after being bought.

Henderson recently addressed his fall when he appeared on an episode for the XY podcast, noting he “probably didn’t check the documentation like I should have”.

“If I was advising now, I would literally read the Corporations Act. I’d get an understanding of what that means for me and for my business,” he told the podcast.

“Even the masters degree in the banning order … was put down to a cut and paste issue by another staff member but by the same token I need to own the fact it was in there and … I should have read it and I should’ve had it taken out.

“When I wrote it I had the words ‘in progress’ in there. ASIC accepted my explanation as to how the statement may have been inserted and ‘do not find any dishonesty on Mr Henderson’s part’.”

However, the court did find on ASIC’s behalf that Maxwell had acted inappropriately in supplying documents that made false claims as to possessing a masters for seven years.

Henderson has since reinvented himself following his disqualification, launching a hamper business and styling himself as a life coach for budding executives.

He spruiked the sale of Henderson Maxwell on his website, referring to himself as “a celebrity and multi-award-winning financial adviser”.

“Today, Sam describes the royal commission as a ‘gift’ and the subsequent media storm as ‘happening for him and not to him’ drawing upon his deep philosophy of helping people and contributing back to the community while also taking ownership and responsibility for his shortcomings,” it says on his website.

Henderson, banned from providing financial advice, now provides business advice both for free and for those who’ll pay.

“By working with someone who has experienced a high level of success, and then ‘walked through the valley of death’ and then out again, ensures you’re drawing upon expert knowledge, education, deep experience and the mental fortitude required to fast track your entrepreneurial journey,” his website says.