Berthel Fisher & Company Financial Services (Berthel Fisher) and its insurance-based broker-dealer affiliate Securities Management and Research are headquartered in Cedar Rapids, IA, and are believed to have over 280 independent financial advisors working nationwide, handling over 4,000 accounts and over $610 million in assets according to Brightscope.
The Financial Regulatory Authority (FINRA) provides an Office of Dispute Resolution for investors to address their complaints with broker-dealer firms like Berthel Fisher. In fact, last July, Berthel Fisher was on the receiving end of $1.16 million FINRA arbitration award in the case of a claim involving sales of problematic alternative investments including non-traded real estate investment trusts (REITs). That came on the heels of a FINRA regulatory fine of $775,000 against Securities Management and Research, the insurance-based broker-dealer affiliate of Berthel Fisher for failing to properly supervise sales of non-traded REITs and other products.
Recently, in light of the market volatility surrounding Covid-19 and other factors, a number of broker-dealer firms have temporarily taken risky, complex alternative investment products such as non-traded REIT investments off the shelf and temporarily prevent those transactions which should be a red flag for investors with low or moderate risk tolerance who may have already been sold these products.
What Should Berthel Fisher Investors Do If They Already Own These Products?
First, assess your situation. Don’t just look at the value on your statement as represented by the sponsor, but do some research and try to ascertain any recent sales price from a secondary market source. All brokers-dealers, including Berthel Fisher, have to be registered with FINRA. If this sounds too complicated for you, simply contact an experienced investment fraud lawyer and they will help you do this, and be able to alert you to any concerns in your investment accounts.
Non-traded REIT products such as Northstar Healthcare and other similar investments have a sponsor stated valuation that is nowhere near the current prices being paid by willing buyers. Investors are often shocked when they realize the differential and what may be the true extent of their losses in these investments. Most investors purchased these securities based on what they believed to be trustworthy recommendations by financial advisors, some of whom failed to properly disclose the product risks and other material risks, and often just touted the income stream.
If you are an investor holding these non-traded REIT securities, you should investigate the status of these products and consider your options and next steps.
Obviously you have the choice to wait and hope something changes with your investment. However, you risk bringing a claim because of the statute of limitations, rules and other potential laws be negatively impact your case.
The other option is to contact an investment fraud lawyer who reviews your case and gives you options to recover your losses. One way to recover losses is through a Financial Regulatory Authority (FINRA) claim. A FINRA claim is faster and more efficient than a traditional lawsuit. Recently regulators suggested that recommendations of like non-traded REITs and non-traded BDCs (private placements) are not always appropriate for investors who may need liquidity or retired.