On 26.4.18, the SMSF Association issued a statement that it has initiated disciplinary proceedings against an Associate member in response to conduct revealed at the Financial Services Royal Commission (FSRC).
The SMSF Association said it was disappointed by the alleged conduct attributed to the financial planner, Sam Maxwell Henderson, and Henderson Maxwell Proprietary Limited, as revealed the public hearing of the Banking Royal Commission on 24 April 2018 (see the transcript).
Broadly, Commissioner Kenneth Hayne heard evidence, in relation to Mr Henderson’s financial advice, to a client, recommending she establish a self-managed superannuation fund (SMSF) and roll over her available funds, from her existing SASS super fund. However, as the SASS super fund was a deferred benefit scheme and rolling over the benefit would have resulted in a loss of approximately $500,000, the Commission heard.
In its ‘Statement’ the SMSF Association, in essence distanced itself from Mr Henderson, saying that it had not accredited his knowledge, and cut him loose, saying it was investigating the apparent breaches of its Code of Conduct and would take ‘disciplinary action’.
Specifically, it said the following:
- Mr Sam Henderson is an Associate member of the SMSF Association. He does not hold an accreditation from the SMSF Association and has not had his knowledge and expertise validated by the Association.
- Only SMSF Association Specialist members are entitled to use the SMSF Association brand once they have been accredited by the Association.
- The SMSF Association is disappointed by the conduct attributed to Mr Henderson and Henderson Maxwell revealed by the Royal Commission.
- The conduct appears to have resulted in breaches of the SMSF Association Code of Conduct which all members must abide by.
- Accordingly, the SMSF Association has initiated disciplinary proceedings regarding Mr Henderson’s conduct.
- If it is proven that Mr Henderson has breached the SMSF Association’s code of conduct, appropriate sanctions will be applied.
- The SMSF Association’s member conduct and disciplinary procedures can be found here: https://www.smsfassociation.com/about-us/member-conduct-discipline/
- The SMSF Association is concerned by any instances of SMSFs being inappropriately recommended as a superannuation vehicle to consumers. SMSFs are not appropriate for everyone and financial advisers should carefully consider and understand the personal circumstances of their clients before recommending an SMSF as a retirement savings vehicle.
[SMSF Association: statement regarding Henderson; FJM; LTN 78, 26/4/18; Tax Month – April 2018]
Study Questions (answers available)
- Would Mr Henderson’s advice have cost his client about $500k?
- Was this the amount of her deferred benefit, she would have lost, from rolling her superannuation into an SMSF?
- As an ‘Associate’ member, had the SMSF Association accredited his knowledge?
- Has the SMSF Association commenced disciplinary proceedings against Mr Henderson?
