High profile former adviser, Sam Henderson has been banned from providing financial services for three years following an Australian Securities and Investments Commission (ASIC) surveillance.
The regulator announced today that Henderson, who became notable after appearing before the Royal Commission, had been banned on the basis that he had failed to act in the best interests of his clients, provide appropriate advice and to prioritise his clients’ interests when providing financial advice.
It said this led to clients either losing money or being at risk of losing money.
ASIC said Henderson was an authorised representative, responsible manager, director and chief executive of Australian Financial Services Licensee, Henderson Maxwell Pty Ltd.
In one example, cited by the regulator, it said Henderson failed to adequately investigate and assess his clients’ existing deferred benefit superannuation products. This resulted in a financial loss of several thousand dollars to one client when they rolled over their deferred benefit. Another client, who did not roll over their deferred benefit, would have incurred a $500,000 loss had they implemented Mr Henderson’s advice.
ASIC also found that Henderson did not 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.
Comments
Is this a behaviour a cultural thing that the FPA teaches it's members? It's ok for the FPA to get payments from product manufacturers, which has the potential to influence who they act for, so why not their advisers as well. The FPA bundles up payments and is so ashamed they hide them in members fees so why can't FPA financial planners do the same thing and also not disclose these relationships. Clearly FPA members find this behaviour acceptable. Perhaps ASIC should start investigating FPA members further.
The FPA would claim they stopped accepting product manufacturer payments some years ago. Yet you claim they "bundle up payments" and "hide them in members fees". You also seem to think this warrants an ASIC investigation. Care to expand a little?
The FPA never stopped receiving money, they removed the ability for them to vote. Commonwealth FP, AMP FP, Bridges all pay the FPA annual fees via their professional partner program. To indirectly quote the FPA "this is a program where partners drive the direction of advice in Australia". Many of these firms manufacture a product or are 100% owned by a product manufacturer. Do you get "special" payments from your licensee or product manufacturer? These fees paid annually are then bundled up and disclosed as "member" fees on the FPA annual report. Why does this matter? I will ask you a question, if the FPA get's payments from AMP FP and another from an AMP adviser who do they represent here, who do they represent to Treasury??? Please name me one professional association that has that type of relationship? At the end of the day it's a trust game and reducing Government regulation. Surely there has to be a body that puts the needs of Australians and Advisers first and some product manufacturer last.
true and totally disgusting. but, to answer your question there isn't a body yet. maybe we need to form a new one.
Whilst he deserved to be banned for putting his personal profits ahead of his clients. The main problem he had was being a qualified adviser.
Accountants, mortgage brokers, property developers and basically everyone who isnt a financial adviser can recommend changing super to a SMSF without considering any detremental effect on a client's financial wellbeing.
Why would anyone ever waste time with FASEA when everyone else can do exactly what we do however without the threat of being banned or sued and without all the restrictions and costs forced upon us
Sadly I agree with Anon. Put this disclaimer at the bottom of your "suggestions" and be happy "Disclaimer:- This material is for educational purposes only. It does not constitute financial advice. XXX is not a qualified financial adviser and recommends you pay for professional advice before you act." Should cover you, reduce your costs, and allow you to blame an adviser if anything goes wrong. Even better AFCA will not accept the case, and ASIC has not regulated educational items.
accountants can't recommend the SMSF set up unless licensed. If it's the specific SMSF license you disagree, then I agree, it's a farce.
Dear Bozo I was thinking about how educations avoids the whole issue. Take this quote from ASIC money smart website. You can check the spelling as well, since it is challenging for ASIC. "Financial Health for Teachers is a personal learning program developed in partnership with Scott Pape, the 'Barefoot Investor' designed to: inspire and empower teachers; help teachers feel confident with money; provide practical strategies for dealing iwth financial issues in Scott's '60, 60, 6 challenges'.
Teachers share their financial stories via video designed to help you feel confident and in control of your money."
See it is easy, and low risk, ASIC will endorse you, and all you have to do is say the magic words "Educational material"
I agree, and that's why many advisers have already moved to effectively split their businesses. One part is education and coaching for a fee. The other the AFSL stuff if advice is required. Like all these people in the media you can blur the lines a bit apparently, and get a lot of work done on one side of the fence without the hassle. And then really charge what the AFSL stuff is worth if that is where the client wants to go.
Go ASIC! Yet another case of guilliotining the mortally wounded. Waste of time and resources just to be seen to be keeping up with Haynes. This banning of an adviser on forced retirement whilst large corporates and their sales forces of advisers get a CEU slap on the wrist for almost identical behavior. And all the while ASIC ignores the cosy promoter fee arrangements between platform providers and advisory groups that have been banned as conflicted remuneration (no grandfathering for new clients since 2014). How is the thought of giving ASIC more powers to persecute the small fry even contemplated when they are incapable of enforcing FOFA breaches on a wholesale scale involving big business and thousands of clients?
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