April 27, 2018
High profile financial adviser, Sam Henderson and his business may be open to criminal charges for failing to meet best interest duty obligations, according to evidence presented to the Banking Royal Commission.
As part of the closing remarks at the end of two weeks of hearings related to financial advice, Senior Counsel Assisting the Commission, Rowena Orr QC said, “On the evidence, it is open to the Commissioner to find that Mr Henderson’s conduct in connection with the advice he gave…might amount to misconduct”.
According to Orr, Henderson may have breached his obligations under section 961B of the Corporations Act which required him to act in the best interests of his client.
He may also have breached obligations under section 961G to provide appropriate advice and under section 961J to prioritise his clients interests ahead of his own or that of his business, Henderson Maxwell.
“It was also open to the Commissioner to find that Henderson Maxwell’s conduct in connection with advice Henderson gave…might amount to misconduct,” Orr said.
She added that the firm, which was named as the 2016 AFA Practice of the Year, may have breached section 952E1 of the Corporations Act due to the provision of a defective Financial Services Guide to a client.
Further possible breaches may relate to conduct that fell below community standards in which an employee of Henderson Maxwell impersonated a client on at least five occasions and Henderson’s failure to assist the FPA in the resolution of complaint brought by the client.
Henderson appeared before the Commission after he advised a client, who also appeared before the Commission, to roll a public-sector superannuation fund into a SMSF managed by Henderson Maxwell.
The fund would have been managed at a substantial cost to the client and the roll-over advice would have resulted in a loss of $500,000 for the client as a result of an early withdrawal from the fund.