Inquiry kept secret Industry group worried about negative publicity
Townsville AN INDUSTRY group representing financial planners tried to keep secret its investigation of “damning” allegations against high- profile adviser Sam Henderson, the finance industry royal commission has heard.
And the group, the Financial Planning Association, tried to avoid having the report published as part of the commission process, it has heard.
It also emerged yesterday that the FPA ignored its own investigator’s recommendation against Mr Henderson over advice that would have lost a client $ 500,000.
Counsel assisting the commission Rowena Orr, QC, tabled a confidential FPA email that showed it was worried about issues such as negative publicity for Mr Henderson despite the serious nature of the allegations made against him.
“It is an ongoing matter, and again the FPA asks that the matter be treated confidentially,” the email said.
It said “any publication by the royal commission identifying Mr Henderson would render the conduct review committee process worthless to Mr Henderson, undermine the process of the conduct review commission and damage the FPA’s relationship with other members”.
Under questioning, FPA chief Dante De Gori said Mr Henderson was “uncooperative” over an investigation into the advice he offered then client Donna McKenna.
Mr De Gori acknowledged the inquiry into the advice had now been running more than a year.
It emerged on Tuesday that had Ms McKenna taken Mr Henderson’s advice, she would have immediately lost $ 500,000 of her superannuation.
It was also revealed that a woman from Mr Henderson’s office impersonated Ms McKenna in a phone call to Ms McKenna’s superannuation fund to garner details about her super.
Ms Orr said yesterday that the internal FPA report was “damning”.
The report highlighted a “lack of objectivity” and a “conscious decision to place his own interests before those of the client”, she said.
But instead of throwing the book at Mr Henderson, the decision on his fate was handed to the FPA’s conduct review committee.
In a watered- down recommendation to that committee, the FPA suggested reprimands such as making Mr Henderson pay his overdue membership fees and making his staff do more training.
It also recommended Mr Henderson get an independent person to review his business practices but that the findings be kept from the public.
The FPA committee was yet to decide on those recommendations, but Mr De Gori insisted a decision was “imminent”.
Ms Orr also noted the harshest penalty available to the association was expulsion, but that was not pursued in Mr Henderson’s case.
Mr Henderson has a high public profile after appearing on TV programs, writing columns in newspapers and hosting events for the FPA.
Mr De Gori said he did not know why the association tried to keep the findings against Mr Henderson secret and it was not protecting members interests’ above those of consumers.
“I’m not aware how that particular component got into the final terms. It could be possible that Mr Henderson requested it,” he said.
Ms Orr said Ms McKenna was told she would not be able to advocate her case before the FPA review committee.
Mr De Gori acknowledged he had received a letter from Mr Henderson describing Ms McKenna’s complaints to the association as “aggressive and nitpicking”.
Mr Henderson then asked the FPA not to tell her of his harsh description of her.
Mr De Gori denied that was why the submission to the FPA was not passed to Ms McKenna.
While the association’s committee could expel members, the organisation had no power to stop people from practising in the financial planning industry, he said.
Mr De Gori said five members had been expelled in the past five years.
It was revealed the conduct review committee had made 18 determinations in the past five years, but seven of those were kept secret.
“Don’t the public have a right to know ( if planners) have breached your policies, codes and procedures,” Ms Orr asked.
The FPA — which dubs itself the “leading professional community of financial planners” — said it had more than 13,000 members, with 11,400 said to be practising financial planners.