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.
Silver Law Group previously blogged about issues involving Wesselt.
Wesselt Recommended A Series Of Unsuitable Whole Life Insurance Policies
The allegations include that Wesselt recommended a series of whole life insurance policies. A whole life insurance policy provides a certain coverage amount that remains the same for the insured’s entire life, as long as the insured pays premiums. Additionally, whole life policies accrue “cash value” over time based on the premiums paid. Among the advantages of a whole life policy are that the insured can borrow money against the cash value of the policy.
While whole life insurance policies are not always a bad investment, these policies have a variety of risks and disadvantages that need to be disclosed and taken into account prior to recommendation and sale. First, these policies are expensive. Whole life insurance policies involve high monthly premiums as well as substantial up-front costs and fees. Investors should be weary that a significant portion of these initial costs and fees actually end up being paid to their broker in the form of commissions and fees. Second, whole life insurance policies take a long time to build up cash value. Thus, whole life insurance policies can lock up funds in an illiquid form and fail to accrue any real value for several years. This type of arrangement is only appropriate for certain types of investors.
Wesselt Has Been Accused Of Improper Conduct Related To Insurance Products Many Times
Wesselt, the founder of Wesselt Capital Group, has been the subject of many customer complaints, disclosed on his FINRA CRD Report, which allege improper conduct in connection with the recommendation and sale of insurance products:
- In October 2016, ONESCO settled a claim in which the customers alleged that “sale of variable annuity and life insurance were unsuitable”
- In September 2019, ONESCO settled a claim in which the customer alleged “several transactions related to the sale of life insurance were unsuitable”
- In November 2019, ONESCO settled a claim in which the customer alleged “unsuitable investment recommendations, investment strategy, and misrepresentations and omissions” related to variable annuities and insurance products
- In December 2019, ONESCO settled a claim in which the customer alleged “Mr. Wesselt recommended the purchase of whole life insurance products funded by taking loans against cash values of existing policies and withdrawing money from annuities, IRA and 529 savings accounts” and that the “strategy was unsuitable based on their goals and objectives”
- In January 2020, ONESCO settled a claim in which the customer alleged “unsuitable investment recommendations and misrepresentations” relating to variable annuities and insurance products
- In January 2020, ONESCO settled a claim in which the customer alleged “unsuitable investment recommendations in breach of customer protection rules” relating to fixed and variable annuities
- In March 2020, ONESCO settled a claim in which the customer alleged “Mr. Wesselt engaged in unsuitable sales of insurance and annuities”
Did You Lose Money Investing With Richard Wesselt?
Insurance products can carry high fees, up-front costs, and commissions. Insurance products are complex and sometimes these fees are hidden from unsuspecting main street investors. The recommendation of these products without proper disclosures, often motivated by high commissions, can result in investors suffering losses and may constitute investment fraud.
Brokerage firms like ONESCO and Fortune Financial Services, Inc. are obligated to supervise their brokers and to implement policies and procedures to prevent the improper recommendation and sale of insurance products like those that are the subject of the numerous complaints on Wesselt’s BrokerCheck Report. If the brokerage firm fails to properly supervise its employees, the firm may be liable to investors for the resulting losses.
Silver Law Group is experienced in representing aggrieved investors with claims related to insurance products. If you or someone you know experienced losses investing with Wesselt, contact Silver Law Group for a confidential consultation toll free at (800)-975-4345 or email email@example.com.