Celebrity financial adviser Sam Henderson issued advice that would have cost his client $500,000 in superannuation losses had she heeded it, the banking royal commission has heard.
Fortunately for Donna McKenna, who is a Fair Work commissioner, she saw through the plan and refused to act on it.
Mr Henderson, a long-time contributor to TV financial segments on Sky News and Channel Nine, and who also wrote articles for The Australian Financial Review, The Sydney Morning Herald and Money Magazine, was first consulted by Ms McKenna in November 2016.
She told Mr Henderson, an award-winning adviser, she wanted advice on superannuation in light of legislative changes from mid-2017 and how she might help her children financially.
Mr Henderson repeatedly advised her to open a self-managed super fund (SMSF) and move 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.
Ms McKenna described the planner’s advice, which would have seen her forfeit the enormous sum, as “risible”.
“I can’t believe I’ve been to see the Financial Planner of the Year and this is what you get,” she said.
Mr Henderson blamed the poor advice on a mistake by his staff.
“It was the paraplanners,” he told her.
However, Mr Henderson’s staff (who numbered only six) had only discovered the plan would cost her half a million dollars by impersonating Ms McKenna.
The commission heard two recordings of a Henderson Maxwell staffer pretending to be Ms McKenna speaking to her super fund and finding out the details of her balances before and after the planned rollover.
“Did you know one of your employees was impersonating Ms McKenna?” counsell assisting Rowena Orr QC asked him. Mr Henderson said: “No … I was horrified. I wanted to terminate her employment.”
The staffer was not sacked. During one of the conversations she asked the super fund adviser to hold while she consulted someone in the office. Mr Henderson told the commission he was in the office at the time but denied he was the one consulted.
“So your evidence is that having received this information by impersonating Ms McKenna, your employee did not pass that on to you?” Ms Orr asked.
“I don’t recall,” he replied.
Mr Henderson claimed he finally rang the super fund himself and discovered the true situation just before a meeting with Ms McKenna.
Ms McKenna complained to the Financial Planning Association (FPA) about the quality of Mr Henderson’s advice. The FPA found he had a case to answer for breaches of ethics and professional standards.
The FPA investigator found “there is a strong and reasonable inference that the member’s conduct stemmed from a lack of objectivity or a conscious decision to place his own interests before those of the client’s”.
The annual fees proposed by Mr Henderson’s strategy would have been almost $19,000 while Ms McKenna’s existing strategy was costing her $2768 a year.
Sky issued a statement saying: “Sam Henderson is a former contributor of Sky News.”