Woodbury Financial Services, Inc. (CRD#: 421) has many different complaints filed by the U.S. Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), state regulatory organizations, and investors such as yourself.
If you’ve suffered losses with Woodbury Financial Services, you may have legal options to recover your investment losses. The firm’s documented history of regulatory violations and supervisory failures means many investors have valid grounds to pursue claims through FINRA arbitration.
At the Law Offices of Robert Wayne Pearce, we have investigated Woodbury Financial Services, Inc. complaints (Woodbury), its regulatory problems, and represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. Time is critical in investment fraud cases—regulatory deadlines may prevent you from recovering losses if you wait too long to act.
Can I Sue Woodbury Financial Services?
Yes, you can sue Woodbury Financial Services if you believe they engaged in misconduct, negligence, breach of contract, or violated securities regulations that caused you financial harm. Whether the case is pursued through arbitration, mediation, or a lawsuit in court will depend on the specific circumstances of your claim and the agreements you signed with the firm. It’s important to consult with an experienced securities or financial services attorney who can evaluate your situation and determine the best legal strategy.
How to Sue Woodbury Financial Services for Investment Losses
What Can I Do If I Lost Money at Woodbury Financial Services?
If you lost money at Woodbury Financial Services, you can pursue claims through FINRA arbitration—the primary forum for resolving investor disputes with broker-dealers. FINRA arbitration is a legal process designed specifically for securities cases, where an independent panel reviews your claim and has the authority to award compensation for your losses.
Most investor accounts include arbitration agreements requiring disputes to be resolved through FINRA rather than court. This means you cannot typically sue in traditional court, but you can still recover your losses through the arbitration process. The arbitration process is often faster than court litigation and specifically tailored to investment disputes.
Woodbury’s documented regulatory violations—including SEC orders for breach of fiduciary duty, FINRA censures for variable annuity supervisory failures, and failures to provide sales charge discounts to eligible customers—demonstrate a pattern of misconduct that may directly relate to your investment losses. If your financial advisor placed you in unsuitable investments, charged excessive fees, failed to disclose conflicts of interest, or engaged in other misconduct, these regulatory findings strengthen your claim.
The key to success in FINRA arbitration is having experienced legal representation who understands both the technical requirements of securities law and the specific history of firms like Woodbury. An attorney can gather evidence of regulatory violations, connect them to your specific losses, and present a compelling case to the arbitration panel.
Who Can Help Me Sue Woodbury Financial Services?
You need a securities attorney with specific experience in FINRA arbitration and familiarity with cases involving independent broker-dealers like Woodbury Financial Services. Not all attorneys handle securities arbitration cases, and the specialized nature of investment fraud law requires expertise in both securities regulations and the arbitration process itself.
Look for an attorney who has successfully handled cases against major broker-dealers, understands the common supervisory failures at independent broker-dealer firms, and can demonstrate a track record of recovering losses for investors. Many securities attorneys offer free consultations to evaluate whether your case has merit and explain the arbitration process in detail.
What Is Woodbury Financial?
The company was founded in 1968 and has been engaged in its broker-dealer and investment advisory businesses since that time. It is indirectly controlled by The Advisor Group, Inc. with branch offices located throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 800 Woodbury branch offices with over 1200 registered representatives in almost every state. It is now one of the largest broker-dealer and investment advisory firms in the United States.
Why Does Woodbury Financial Have So Many Bad Reviews and Customer Complaints?
Woodbury Financial operates as an independent broker-dealer, which means its financial advisors run their own separate businesses rather than working as direct employees. This franchise-style business model creates serious gaps in supervision because the firm doesn’t have managers physically present in most branch offices to monitor day-to-day activities.
Instead of on-site supervision, Woodbury relies on remote oversight from Offices of Supervisory Jurisdiction (OSJs). These OSJ managers are themselves independent contractors running their own businesses, which means they cannot devote full-time attention to supervising branch office activities. As a result, there is typically no immediate review of new accounts, securities transactions, or client correspondence at individual branch offices.
This lax supervision creates an environment where investors are vulnerable to sales abuses. Financial advisors may place clients in unsuitable investments, use misleading sales materials, or falsify information about a client’s investment objectives—all without anyone detecting the problems until after significant losses occur. Many offices receive only one compliance audit visit per year, leaving investors exposed to misconduct for extended periods.
The North American Securities Administrators Association (NASAA) has documented that independent broker-dealers like Woodbury experience more instances of sales abuse and investor losses compared to traditional brokerage firms with on-site managers and compliance personnel. This structural weakness in the independent broker-dealer model explains why Woodbury has accumulated so many regulatory violations and customer complaints over the years.
Examples of Regulatory Problems and Complaints for Woodbury
Woodbury’s rapid growth has not been without consequences. There have been at least twenty-one Federal, state and self-regulatory body disclosure events; that is, 21 final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agencies like the SEC, FINRA, and states who are members of the North American Securities Administrators Association (NASAA)) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against Woodbury 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. Woodbury is a repeat offender: there are at least 21 SEC, FINRA and state reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE COMPLAINTS AND REGULATORY PROBLEMS WOODBURY HAS FACED OVER THE YEARS*
Woodbury has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. A few of the notable SEC and FINRA investigations for its misconduct are below:
SEC Orders Woodbury And Its Affiliates To Pay Over $2 Million To Investors
This proceeding arises from breaches of fiduciary duty and multiple compliance failures by Woodbury in its fee based advisory business. During the relevant period, Woodbury invested advisory clients in mutual fund share classes with 12b-1 fees instead of lower-fee share classes of the same funds that were available without 12b-1 fees. The affected clients were advisory clients whom Woodbury invested in a fee-based advisory service called the Advisor Managed Portfolio (“AMP”) in accounts that are not qualified retirement or ERISA accounts, where 12b-1 fees are rebated. In its capacity as a broker-dealer, Woodbury received 12b-1 fees paid by the funds in which AMP advisory clients invested. By investing these non-qualified advisory clients in the higher-fee share classes, Woodbury and its affiliates received approximately $2 million in 12b-1 fees that they would not have collected from the lower-fee share classes. Woodbury failed to disclose in their Forms ADV or otherwise that they had a conflict of interest due to a financial incentive to place non-qualified advisory clients in higher-fee mutual fund share classes. As a result, Woodbury breached its fiduciary duty as an investment adviser to certain of their AMP advisory clients by investing them in higher-fee mutual fund share classes. In addition, Woodbury failed to adopt any compliance policy governing mutual fund share class selection. It also failed to monitor advisory accounts quarterly for inactivity or “reverse churning” as required under their compliance policies and procedures to ensure that fee-based advisory or “wrap” accounts that charged an inclusive fee for both advisory services and trading costs remained in the best interest of clients that traded infrequently. This conduct violated Section 206 of the Investment Advisors Act of 1940.
Woodbury Censured And Fined For Variable Annuity Supervisory Failures
During the Relevant Period, Woodbury’s system for supervising additions to existing variable annuities was not reasonably designed to achieve compliance with applicable securities laws and FINRA rules, including those governing suitability — a problem that affected more than 3,800 transactions during this period. Woodbury did not review additions resulting from recommendations to invest additional funds in existing variable annuity contracts, either before or after the transaction, unless the addition was funded from the proceeds of an exchange. Woodbury also did not use surveillance tools, such as exception reports, to monitor additions to variable annuities and provide the firm with information about potentially unsuitable transactions. As a result, Woodbury violated NASD Rule 3010 (for conduct before December 1, 2014) and FINRA Rules 3110 (for conduct on and after December 1, 2014) and 2010.
Woodbury Censured And Fined For Unit Investment Trust Supervisory Failures
During the Relevant Period, Woodbury disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (‘Eligible Customers’). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. Many mutual funds waive the up-front sales charges associated with Class A shares for certain retirement plans and/or charitable organizations. Some of the mutual funds available on the Firm’s retail platform during the Relevant Period offered such waivers and disclosed those waivers in their prospectuses. Notwithstanding the availability of the waivers, Woodbury failed to apply the waivers to mutual fund purchases made by Eligible Customers and instead sold them Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. These sales disadvantaged Eligible Customers by causing such customers to pay higher fees than they were actually required to pay. During this period, Woodbury failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Woodbury violated F1NRA Rule 3110 and FINRA Rule 2010.
Woodbury Censured And Fined For Failure To Reasonably Supervise The Sale of Multi-Share Class Variable Annuities
Woodbury failed to establish, maintain and enforce a supervisory system and written procedures designed to reasonably supervise representatives’ sale of multi-share class variable annuities and failed to provide training to their representatives and principals on the sale and supervision of multi-share class variable annuities. For example, the Firms’ procedures did not specifically address the suitability issues related to the different surrender periods, fees and costs of the different variable annuity share classes. Similarly, the Firm’s procedures did not specifically address the suitability concerns raised by the sale of an L-share contract when combined with a long-term income rider or to a customer with a long-term investment time horizon. As a result, the Woodbury violated FINRA Rules 2330(d) and (e), F1NRA Rule 3110, and FINRA Rule 2010.
Woodbury Censured And Fined For Failing To Supervise Unit Investment Trust Sales Practice Abuse
During the Relevant Period, the Firm failed to apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (“UITs”) in violation of FINRA Rule 201 0. Time and again, FINRA has reminded members that they should develop and implement procedures to ensure customers receive available sales charge discounts for UITs. FINRA has stated that UIT transactions must take place “on the most advantageous terms available to the customer” and that it is the firm’s responsibility to “take appropriate steps to ensure that they and their employees understand, inform customers about, and apply correctly any applicable price breaks available to customers in connection with UITs.” The Firm failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that customers received sales charge discounts on all eligible UIT purchases in violation of NASD Conduct Rule 3010 and FINRA Rule 2010.
Woodbury Censured And Fined For Failing To Supervise Excessive Trading Sales Practice Abuse
Woodbury failed to establish, maintain and enforce an adequate system to review equity trades for excessive trading. Specifically, Woodbury’s written supervisory procedures required equity trades to be reviewed for appropriateness of commissions, excessive trading and suitability where trades were solicited.The Firm primarily relied upon its Trade Desk to identify excessive trading by reviewing the Firm’s Daily Trade Commission Report (the “Trade Report”). The Trade Report did not include the number of shares purchased or sold, the total cost of the transaction, the account name, or the age, investment experience or risk tolerance of the account holder. In addition, the Firm did not utilize any exception reports or systems that delineated the average holding periods, commission v. equity ratio, or the turnover ratio in customer accounts.As a result, at all times relevant, the Firm failed to establish and maintain an adequate system of follow-up and review for the Firm to determine whether its registered representatives were engaged in excessive and therefore unsuitable equity trades.
Woodbury Censured And Fined For Variable Life Insurance Supervisory Failures
During the Relevant Period, Woodbury failed to establish an adequate supervisory system and failed to implement adequate supervisory procedures to review the suitability of variable life insurance applications. Specifically, Woodbury’s then existing procedures did not require that persons responsible for conducting suitability reviews of variable life applications and for approving those applications, in connection with that review, to: 1) consider the customer’s ability to afford premium payments; 2) consider whether the customer had existing life insurance policies and required additional insurance; 3) consider the customer’s liquidity needs; or 4) consider the method by which the customer would fund the policy. In certain instances, these supervisory failures resulted in 1) customers owning policies that required annual premium payments equaling a significant percent of the customer’s stated annual income; 2) sales to customers who had no need for the insurance being offered; and 3) customers withdrawing money from IRA accounts in order to fund the policy. As a result, Woodbury violated NASD Conduct Rules 3010(a) and (b) and Rule 2110.
*Above are only some of the regulatory disciplinary actions filed against Woodbury Financial by FINRA. NASSA and other state securities regulator investigations and enforcement actions account for more BrokerCheck disclosures.
How to File an Official Complaint Against Woodbury Financial Advisor or one of its brokers with FINRA
If you believe you’ve been harmed by misconduct, negligence, or unsuitable investment advice from Woodbury Financial Services or one of its brokers, you have the right to take action. Woodbury Financial (CRD#: 421) has a long history of regulatory issues, including SEC and FINRA sanctions for supervisory failures, conflicts of interest, and customer account abuses. Many investors have already filed complaints citing fraud, breach of fiduciary duty, and other serious violations.
At the Law Offices of Robert Wayne Pearce, P.A., our securities attorneys have investigated Woodbury’s regulatory history and represented investors in FINRA arbitration and regulatory disputes involving this firm.
Filing a complaint with FINRA is not always straightforward, and many investors who go it alone see their claims dismissed or minimized. With our firm’s deep knowledge of Woodbury’s regulatory history, we can help you build a strong case and hold the responsible parties accountable.
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 Woodbury without attorney representation about their complaints and have their complaints denied.
Related Read: Can You Sue Your Brokerage Firm?
How The Law Offices of Robert Wayne Pearce, P.A. Can Help You Recover Losses at Woodbury Financial Services
The Law Offices of Robert Wayne Pearce, P.A. guides investors through every step of the FINRA complaint and arbitration process, from initial case evaluation through final recovery. Our firm handles all aspects of your claim—gathering evidence, analyzing Woodbury’s documented regulatory violations, connecting those violations to your specific losses, and presenting a compelling case to the arbitration panel.
With over 45 years of experience in securities arbitration and more than $175 million recovered for investors, Attorney Robert Wayne Pearce has the expertise and track record to maximize your chances of recovery. We understand how independent broker-dealers like Woodbury operate, where their supervisory weaknesses lie, and how to prove that their failures directly caused your investment losses.
Attorney Pearce offers free consultations to evaluate your case and explain your legal options without any obligation. During this consultation, we’ll review your account statements, discuss the conduct of your financial advisor, and determine whether you have grounds for a successful claim. Don’t let Woodbury’s complex corporate structure or arbitration agreements intimidate you—we handle these cases regularly and know how to navigate the system effectively.
Consult With An Attorney Who Recovers Investment Losses Caused By Woodbury Financial Advisors Today
The securities lawyers at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Woodbury 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.
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