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Banned adviser causes former licensee to compensate clients

A banned adviser has caused his former licensee to pay a total of over $800,000 in compensation to clients for losses caused by the advice he provided, documents from the Federal Court have revealed.

The Federal Court of Australia has backed applications from seven clients of former WealthSure-authorised representative Colin Oberg  who was permanently banned from providing financial services in July 2012 – for his former licensee to pay compensation for losses sustained due to the advice he provided.

The seven former clients of Mr Oberg will be paid a total of $865,500 for losses sustained, according to documents from the Federal Court.

"Each of the applicants is entitled to relief by way of damages or compensation for the loss identified, plus interest from the date of those losses," the documents said.

Also, according to the court documents, WealthSure – which terminated Mr Oberg's authorisation in September 2010 – took no action to contact or notify the former adviser's clients of the action they took to cancel his authorisation.

WealthSure has since been sold to the Sentry Group and is now operating under a new AFSL.