The Ombudsman for Banking Services and Investments (OBSI) says that GP Wealth Management, Sentinel Financial Management, and yourCFO Advisory Group have all refused to pay compensation to clients as recommended.
In the case of GP Wealth Management, an advisor told a couple that they would only have to pay $20,000 in deferred sales charges (DSCs) if they cashed in their investments, but they actually ended up paying $45,455. OBSI says that both GP Wealth Management and the advisor had an obligation to inform the client of the correct DSCs prior to processing the redemption but they did not do so. Since the clients understood and were willing to pay $20,000 in DSCs, OBSI recommended that GP Wealth Management compensate the couple for the additional $25,455 in charges they incurred.
As for Sentinel Financial Management, the problem involves an advisor who pretended to offer off-book investments to clients, but in fact took the money and deposited it in her personal account; none of the clients’ funds were invested. OBSI holds Sentinel responsible for the advisor's conduct and told the firm it should compensate clients for losses totalling $265,711.
Finally, the case at yourCFO also involves an advisor who sold off book investments, recommending that a client invest in a company that was set up to lend money to an unrelated firm that funded second mortgages. While the company was actually owned by the advisor’s husband, the client believed that the investment was made through and approved by yourCFO. In the end, the mortgage lender went bankrupt. OSBI holds yourCFO responsible for the advisor’s conduct and recommended that yourCFO compensate the client for the $139,000 she lost in the deal.
All of these financial services firms refused to follow OBSI's recommendations, which means the OBSI is obliged to publicize that refusal and the details of the complaint.
