Brokerage Firm Review: Cetera Advisors LLC

Cetera Advisors, LLC (“Cetera Advisors”) (CRD# 10299) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Cetera Advisors LLC, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Cetera Advisors LLC, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Cetera Advisors LLC?

If you’ve lost money caused by Cetera Advisors LLC and/or its employees’ misconduct then the answer is, YES, you can sue Cetera Advisors LLC but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Cetera Advisors LLC in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Cetera Advisors LLC is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Cetera Advisors LLC?

Cetera Advisors LLC (CRD# 10299) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.

As a registered broker-dealer, Cetera Advisors LLC is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.

A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.

Cetera Advisors LLC Has Many Different Regulatory Problems 

Cetera Advisors LLC’ rapid growth has not been without consequences. There have been approximately 14 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Cetera Advisors LLC for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Cetera Advisors LLC is a repeat offender: there are over 14 FINRA-reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Cetera Advisors LLC Has Faced Over the Years*

Cetera Advisors LLC has been repeatedly censured, warned, and fined multi-millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

Alleged Breach of Private Client Information

Brief Overview: Cetera Advisors allegedly violated the Safeguards Rule (Rule 30(A) of Regulation S-P) by failing to protect personally identifiable information. Between November 2017 and June 2020, unauthorized third parties reportedly gained access to email accounts belonging to over 60 personnel across various Cetera entities. This breach resulted in the exposure of sensitive customer information. Cetera consented to a $300,000 fine in response to the alleged incident.

Lack of Supervision Allegations

Brief Overview: Cetera faced allegations of inadequate supervision concerning outside securities transactions conducted by dually registered representatives associated with external advisory firms. According to FINRA, the firm lacked the necessary information to conduct suitability reviews, which assess whether transactions align with customers’ financial goals and risk tolerance. As a consequence, Cetera consented to pay a $150,000 fine.

SEC Complaint: Mutual Fund Fees

Brief Overview: The Securities and Exchange Commission (SEC) filed a complaint on April 29, 2020, accusing Cetera Advisors and Cetera Advisor Networks of prioritizing their financial interests over those of their clients. Brokers at the firms allegedly recommended more expensive mutual fund investments, despite the availability of lower-cost alternatives. Additionally, the complaint alleged that Cetera received undisclosed third-party broker-dealer compensation in exchange for promoting specific mutual funds.

Mutual Fund Fee Repayment

Brief Overview: Cetera agreed to a fine on May 3, 2017, following allegations that the firm failed to inform customers about available discounts for mutual funds. Specifically, the firm was censured and required to provide restitution of at least $628,040 to customers. Such restitution aimed to address the potential impact of not offering discounts on Class A shares of mutual funds when investors purchased shares from the same fund family.

Why Does Cetera Advisors LLC Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Cetera Advisors Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Cetera Advisors LLC is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Cetera Advisors LLC without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Cetera Advisors LLC Today!

The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Cetera Advisors LLC cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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