A man who claims to have co-founded Wealth Enhancement Group has filed suit against the acquiring RIA, alleging it refused to pay him “finder's fees” for firms the company bought.
Gerald “Jerry” Bernard filed the lawsuit in Minnesota's Hennepin County, seeking more than $50,000. According to the lawsuit, Bernard has over 40 years in the wealth management industry and co-founded WEG with his wife, Madeline, in 1996.
Bernard claimed to have been chairman and adviser to WEG from 1997 until 2010, when he was asked to resign. After leaving WEG, he founded Uncommon Wisdom, where he provided consulting services to counselors. There is no independent verification of Bernard's role as co-founder or executive working with WEG.
According to the complaint, WEG CEO Jeff Dekko approached Bernard in 2015 with an offer to help the company find financial advisory firms to buy in exchange for a fee. In April 2018, WEG hired Bernard and Uncommon Wisdom as an independent contractor, agreeing to the details of “finder's fees” and a 30-day notice of termination.
If WEG acquired a firm that Bernard brought to the table, the company would pay him a 4% commission on the revenue after 12 months of practice earned from the transactions, according to the complaint. If WEG or the acquired firm used outside counsel, Bernard would receive 2% (with fees capped at $500,000 per transaction).
One of the deals Bernard supposedly brokered was Cimino Estate Advisors, which WEG bought in June 2018 (Bernard received a finder's fee for the deal, according to the complaint). Bernard also allegedly brought Meet wealth management on the tablewhich WEG acquired in January 2019.
“WEG failed to pay (Bernard) the finder's fee owed to him for his introduction of Summit Wealth Management,” the complaint said. “After discovering that the acquisition was imminent, (Bernard) approached WEG about the finder's fee owed, (and) he was told it was 'too late.'
WEG also did not pay Bernardi a finder's fee for helping to create a relationship between WEG and Financial Wealth Management, which the firm acquired in December 2020. According to the lawsuit, the firm did not even tell Bernardi that the deal had occurred.
Bernard also introduced SVA Financial Group to WEG in June 2016, but according to the complaint, WEG did not follow up with him about plans to buy the firm. Bernard had no idea that WEG planned to buy SVA until shortly before WEG presented him with a payment agreement in 2020.
At the time, WEG chief strategy officer Jim Cahn told Bernard that the RIA would buy SVA and that he would be paid $200,000. But Bernard believed WEG owed him $500,000 and refused the reduced payment. Cahn called back and allegedly said Bernard could take $200,000 or nothing for the SVA deal and be “terminated immediately” (Bernard claimed he was hospitalized for chest pains shortly after the call).
Several weeks later, according to the lawsuit, WEG offered Bernard a new payment to replace the original agreement, accepting the SVA and Financial Wealth Management agreements, effectively offering $500,000 to “bring about a settlement” of both claims.
“(Bernard) was told that if he did not sign the payment agreement, he would forfeit all finder's debt fees, including FWM and SVA,” the complaint said. “As a result, (Bernard) felt compelled to sign the payment agreement.”
A spokesman for the Wealth Growth Group declined to elaborate on the case, citing the ongoing litigation.
“The claims made by the plaintiffs are baseless and we will vigorously defend against them,” the spokesman said.