Silver Law Group recently filed a FINRA arbitration claim against The O.N. Equity Sales Company (a/k/a ONESCO) (CRD# 2936) based on the recommendation of improper whole life insurance policies to a customer. The broker, Richard Michael Wesselt (CRD# 2195569), has five other pending customer disputes disclosed on his FINRA BrokerCheck Report, several of which mention insurance products as the basis of the allegations. ONESCO has already settled eight other customer disputes involving Wesselt. Wesselt has since left ONESCO and has been registered with Fortune Financial Services, Inc. (CRD# 42150) since September of 2017.
The National Association of Insurance and Financial Advisors of New York State Inc. (“NAIFA”) filed a lawsuit on November 16 in the New York Supreme Court alleging New York regulation requiring insurance agents and brokers to act in the best interest of their clients when selling life insurance and annuity products is unfair. It is arguing that the state’s Department of Financial Services overstepped its boundaries by promulgating the rule without legislative or constitutional authorization.
The suit also states the insurance sales standard contradicts existing New York insurance law, as it requires insurance sales professionals to prioritize their clients before their firms. Many investors remain confused why insurance agents or financial advisors are not required to act in the clients’ best interest.
Donald Damick, an agent with Nationwide Insurance Companies and past president of NAIFA New York State, has stated that this rule has put him and many other in an impossible situation, as agents are under contractual obligations to act as an agent of the insurer, not of the customer. “I can lose my NYDFS license if I do not follow the state’s insurance statutes, and now I can also face penalties under the regulation’s best-interest standard,” he said.