The corporate regulator has banned high-profile financial adviser Sam Henderson, whose inappropriate financial advice was laid bare in royal commission public hearings last year.
The Sydney-based adviser was banned from providing financial services for three years following ASIC surveillance.
ASIC said the investigation into Henderson’s conduct is continuing, but the ban will be recorded on the Financial Adviser Register and the Banned and Disqualified Register.
Henderson has already been fined $50,000 by the Financial Planning Association of Australia which found him guilty of breaching its professional code of conduct nine times last year.
ASIC found Henderson’s clients either lost or were at risk of losing money as he had failed to act in their best interests of his clients, to provide appropriate advice and to prioritise their interests when providing personal financial advice.
He also failed to properly document or investigate his clients’ existing products, failed to provide advice that was relevant to their specific goals and recommended the use of in-house Henderson Maxwell products without providing product comparisons or justifying why the in-house products were better than his clients’ existing products, ASIC said.
One example of poor advice highlighted during the royal commission was that of Henderson repeatedly pushing Fair Work commissioner Donna McKenna to establish a self-managed superannuation fund to be managed by his practice. She refused but the foundation piece of the resulting Statement of Advice was the establishment of said SMSF.
Had McKenna followed the advice, she would have forfeited a $500,000 deferred benefit available to her under her State Authorities Superannuation Scheme (SASS) account. Unfortunately, ASIC said another client received the same advice and ended up losing thousands of dollars in deferred benefit payment.
ASIC said Henderson, as the director and responsible manager at Henderson Maxwell, was also involved in Henderson Maxwell breaching its obligation as an Australian Financial Services licensee to disclose information about relationships or associations that could influence the financial advice provided.
The regulator said this breach occurred in 2013 when Henderson was an investor in Managed Accounts Holdings (now Xplore Wealth), when a subsidiary of the company provided managed discretionary account services to Henderson Maxwell clients. The firm failed to disclose this interest to its clients in two Financial Services Guides given to them.
ASIC commissioner Danielle Press said: “Financial advisers are required by law to act in the best interests of their clients and prioritise clients’ interests over their own when providing personal advice. They must make every effort to adequately consider their clients’ personal circumstances, needs and goals before providing advice.”
“If providing advice about product switching or recommending in-house products, we expect advisers to demonstrate how their clients’ interests are being prioritised, especially if in-house products have higher ongoing fees. AFS licensees are responsible for ensuring that they disclose any associations that could potentially influence the financial advice they provide.”
Henderson has the right to appeal to Administrative Appeals Tribunal.
In June 2018, Henderson Maxwell was merged with AZ NGA Adelaide-based firm Pride Advice. The Henderson Maxwell team is now employed by Pride Advice, while former general manager Tony Davidson was appointed chief executive of Pride’s Sydney operations.
Henderson contributed to Money magazine until 2018.