A man who claims to have co-founded Wealth Enhancement Group has filed lawsuit against the acquisitive RIA, claiming it reneged on paying him “finder’s fees” for firms the company acquired.
Gerald “Jerry” Bernard filed the suit in Minnesota’s Hennepin County, seeking more than $50,000. According to the suit, 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 WEG’s chairman and advisor from 1997 through 2010 when he was allegedly asked to resign. After leaving WEG, he set up Uncommon Wisdom, where he offered consulting services for advisors. No independent verification of Bernard's role as a co-founder or working executive with WEG is available.
According to the complaint, WEG CEO Jeff Dekko approached Bernard in 2015 with an offer to help the company find financial advisory firms to acquire in exchange for a fee. In April 2018, WEG hired Bernard and Uncommon Wisdom as an independent contractor, agreeing to details of “finder’s fees” and a 30-day notice of termination.
If WEG acquired a firm Bernard brought to the table, the company would pay him a 4% commission on the acquired practice's trailing 12-month revenue from transactions, according to the complaint. If WEG or the acquired firm used an external advisor, Bernard would get 2% (with fees capped at $500,000 per transaction).
One of the deals Bernard allegedly brokered was Cimino Wealth Advisors, which WEG acquired in June 2018 (Bernard received a finder’s fee for this deal, according to the complaint). Bernard also allegedly brought Summit Wealth Management to the table, which WEG acquired in January 2019.
“WEG did not pay (Bernard) the finder’s fee owed for his introduction of Summit Wealth Management,” the complaint read. “After discovering the acquisition was imminent, (Bernard) approached WEG regarding his finder’s fee owed, (and) he was told that he was ‘too late.’”
WEG also didn’t pay Bernard a finder’s fee for helping establish a relationship between WEG and Financial Wealth Management, which the firm acquired in December 2020. The firm didn’t even tell Bernard the deal had happened, according to the suit.
Bernard also introduced SVA Financial Group to WEG in June 2016, but according to the complaint, WEG didn’t follow up with him about plans to acquire the firm. Bernard had no idea 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 the RIA would buy SVA and that he’d be paid $200,000. But Bernard believed WEG owed him $500,000 and refused the reduced payment. Cahn called back and allegedly said that Bernard could take the $200,000 or get nothing for the SVA deal and be “immediately terminated” (Bernard claimed he was hospitalized for chest pains shortly after the call).
Several weeks later, according to the suit, WEG offered Bernard a new payment to supersede the original agreement, acknowledging the SVA and Financial Wealth Management deals, effectively offering $500,000 to “bring about a resolution” of both claims.
“(Bernard) was told that if he did not sign the payment agreement, he would forfeit all finder’s fees owed, including FWM and SVA,” the complaint read. “As a result, (Bernard) felt compelled to sign the payment agreement.”
A Wealth Enhancement Group spokesperson declined to speak in detail on the case, citing the ongoing litigation.
“The claims brought forth by the plaintiffs are without merit, and we will vigorously defend against them,” the spokesperson said.