Sam Henderson, the one-time Sky News celebrity financial adviser, has been fined $50,000 for advice that would have cost his client $500,000 had she taken it. It is the largest fine the FPA has levied against a member.
The Financial Planning Association’s Conduct Review Commission imposed the fine on Wednesday, after finding Mr Henderson guilty of nine out of 10 rule breach allegations brought against him following a complaint by Fair Work commissioner Donna McKenna.
The FPA said Mr Henderson was no longer a member of the association, having been expelled as a result of the breaches.
“The FPA Code requires members to put their client’s interests first. The CRC has ruled that Sam Henderson did not place his client’s interest first or provide professional service objectively, and imposed sanctions accordingly,” FPA chief executive Dante De Gori said.
Mr Henderson’s defective advice to Ms McKenna came to public attention during the financial services royal commission hearings in April. Ms McKenna gave evidence that she had approached Mr Henderson in late 2016, seeking advice on changes to superannuation rules.
Despite the fact that she had requested advice about how she could make the most of her situation and help out her children, Mr Henderson consistently pushed Ms McKenna to roll part of her existing super balance into a fund managed by his firm, Henderson Maxwell.
Part of Ms McKenna’s super was in a rare and generous public sector deferred benefit fund that would add nearly $500,000 to her balance on retirement at 58. At the time of the advice she was 56.
Had she taken Mr Henderson’s advice and rolled that money into an self-managed retirement fund, she would have lost the $500,000, severely damaging her retirement balance.
The royal commission heard that Mr Henderson’s staff impersonated her in a call to her super fund, in which they learned she would lose the $500,000 if she took his advice. Despite that, Mr Henderson said staff had not told him what they had discovered.
The FPA has no legislative power to fine Mr Henderson. However, Mr De Gori told The New Daily that members undertook a contractual obligation to pay when they joined the organisation.
“If he doesn’t pay up, it would go through debt collection and a commercial decision by FPA about taking him through the courts,” he said.
As well as the fine, Mr Henderson is liable for FPA’s costs for its investigations. “The CRC plays a vital role in regulating the conduct of FPA members and upholding the highest ethical standards within the financial planning profession,” Mr De Gori said.
Mr Henderson was a long-time contributor to TV financial segments on Sky News and Channel Nine and also wrote for The Australian Financial Review, The Sydney Morning Herald and Money Magazine.
Mr Henderson the poor advice on a mistake by his staff. “It was the paraplanners,” he told Ms McKenna.