- A lawyer got advice from a financial planner which would have lost her $500,000.
- A customer service officer at the financial planner’s office had impersonated the client to get private superannuation details.
- The planner won the 2016 Practice of the Year award from the Association of Financial Advisers.
A lawyer who went to a Sydney-based financial planner was charged $4950 for advice which would have lost her $500,000.
And evidence given at the financial services royal commission revealed that a staff member at the financial planner’s office impersonated the client to get private details from her super fund.
Donna McKenna, a commissioner at Fair Work Australia, wanted to get independent advice because she was worried about new rules for superannuation.
But she quickly worked out that the advice she got would have cut her retirement nest egg by $500,000.
She told her son: “I can’t believe this, I’ve been to see the financial planner of the year and this is what you get.”
McKenna outlined her case today in a hearing at the royal commission.
“I considered it was my public duty to provide assistance to the royal commission in relation to the particular circumstances that I have encountered in relation to the financial advice that I received,” she said.
The adviser she saw was Sam Henderson, CEO and Senior Financial Advisor at Henderson Maxwell who, according to the firm’s website, “knows his stuff”.
Henderson Maxwell was the 2016 Practice of the Year at the Association of Financial Advisers.
He sometimes writes about personal finance for the Australian Financial Review and appears on Sky News Business, Network Ten’s The Project and Nine’s Today Show.
In late 2016, McKenna heard a lot of publicity about pending changes from July 2017 to superannuation. She was also thinking of buying property or assisting her children with a loan.
Sam Henderson, she said, pushed the idea of establishing a self-managed super fund when they met. She said she wasn’t interested but that he could if he wanted include it in as an option when he gave written advice.
She’d brought with her details of her financial position, including superannuation fund details, which she left with Henderson.
When they met again in December 2016 at the O’Connell Street offices of Maxwell Henderson, she was given a statement of advice.
The core of Henderson’s recommendation was that she pull out all her money from SASS Super and put it into a self-managed super fund managed by Henderson Maxwell.
However, McKenna would lose $500,000 if she pulled out of SASS before she took retirement.
Henderson also recommended she put $3000 a month into the Henderson Maxwell fund and sell her shares and also put that into the fund too.
McKenna said: “So you’re saying I should give all of my money to Henderson Maxwell.”
She said he was disarmed and replied: “Yes.”
McKenna told the royal commission she was “gobsmacked”.
She told Henderson: “If I had followed your advice, I would have lost a half million dollars in superannuation. You’re supposed to be the expert, I don’t profess to be an expert in superannuation or retirement planning, but even I can read members statements.”
In the royal commission, Henderson was called as a witness.
He explained that his advice to McKenna was based on a “flawed understanding” of the terms of her current super fund, SASS.
The initial advice was put together based on a para-planner’s research after they had contacted her super fund, he said.
However, the royal commission then played an audio recording of a phone call to SASS from a woman claiming to be McKenna.
This woman was told the balance of her account and that the retirement age was 58.
The woman asked how much she could withdraw and put into another fund.
Henderson agreed that the person calling was not McKenna but his customer service officer.
Rowena Orr, senior counsel assisting the commission, asked him: “Did you know that your employee was impersonating her.”
Henderson said: “No, I didn’t.”
He then said: “I apologise for the behaviour of that staff member.”
Henderson said he had wanted to terminate her employment but instead, on the advice of the general manager, he gave her a warning.
“I was bitterly disappointed that someone could do that under my responsibility,” he told the commission.
The employee had pretended to be McKenna between four and six times.
A complaint by McKenna to the Financial Planning Association about the advice from Henderson is still unresolved.
Henderson is no longer a member of the Financial Planning Association.