Brokerage Firm Review: Osaic Wealth, Inc.

Osaic Wealth, Inc. (“Osaic Wealth”) (CRD#23131) 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 Osaic Wealth, 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 Osaic Wealth, 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 Osaic Wealth?

If you’ve lost money caused by Osaic Wealth and/or its employees’ misconduct then the answer is, YES, you can sue Osaic Wealth 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 Osaic Wealth in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Osaic Wealth 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 Osaic Wealth?

Osaic Wealth (CRD#23131) 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. Until recently, it was known as Royal Alliance.

As a registered broker-dealer, Osaic Wealth 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.

Osaic Wealth Has Many Different Regulatory Problems 

Osaic Wealth’s rapid growth has not been without consequences. There have been approximately 46 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) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Osaic Wealth 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. Osaic Wealth is a repeat offender: there are over 46 FINRA-reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Osaic Wealth Has Faced Over the Years*

Osaic Wealth 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:

Osaic Wealth Sanctioned For Cheating Customers Out Of Sales Charge Waivers

Brief Overview: FINRA recently investigated Osaic Wealth and discovered that the brokerage firm failed to apply sales charge waivers or purchase class AR shares in approximately 41% of the 529 plan rollover transactions it processed. This impacted approximately 500 accounts in which the rollover purchases totaled approximately $7 million and because customers to unnecessarily pay approximately $235,000 and sales charges and fees to the benefit of the brokerage firm and its advisors. The brokerage firm was censured by FINRA and ordered to pay restitution plus interest.

FINRA Sanctions Osaic Wealth For Failing To Tell Investors About Missing Financial Filings Before Offering Securities

Brief Overview: Without admitting or denying the findings, the brokerage firm consented to findings by FINRA in one of its investigations that the firm failed to tell investors in an offering that the issuer failed to timely make required SEC filings, including Audited Financial Statements. Osaic Wealth had already sold $2.4 million worth of securities and received $171,500 in commissions before it discovered that filings were missing with material information. FINRA censured, fined the brokerage $35,000 and ordered it to pay hundred and $71,500 plus interest in partial restitution to the customers.

SEC Sanctions Osaic Wealth For Volatility-Linked Exchange Traded Products Sales Practice Violations

Brief Overview: In 2020, the SEC initiated cease-and-desist proceedings against Osaic Wealth, F/K/A Royal Alliance, for failing to adopt and implement policies and procedures reasonably designed to prevent unsuitable investments and Volatility-Linked Exchanged Traded Products (“ETPs”). As a result, the SEC alleged the firm’s investment advisers use their discretionary authority over client’s accounts to buy and hold complex ETPs for time periods that were inconsistent with the purpose of the product as described in its offering materials. The SEC ordered the brokerage firm to pay a $500,000 fine.

Osaic Wealth Fined $400,000 For Ignoring Red Flags Of Employees Theft From Customers

Brief Overview: FINRA investigated the theft of $3.8 million from Osaic Wealth customers and found that the brokerage firm ignored Red Flags of potential misconduct in the processing of wire transfers and check requests through which thefts were perpetrated. Without admitting or denying the findings, the firm consented to a Censure, $400,000 Fine, the compensation for the theft to all customers, and a certification that it adopted policies and procedures to remediate the issues identified by FINRA in its investigation.

Osaic Wealth Censured and Fined $350,000 For Multi-Share Class Variable Annuities Sales Violations

Brief Overview: Without admitting or denying the findings, the brokerage firm consented to sanctions and findings that it failed to design and supervise representatives in their sale of Multi-Share Class Variable Annuity’s (“VAS”). The deficiencies included failure to provide sufficient training to the registered representatives in reviewing principles to ensure that they understood the material features of VAS; a lack of policies and procedures governing VAS exchanges; and the absence of any surveillance procedures designed to determine if there were any violations in the offer and sale of the product. As a result, FINRA censured the brokerage firm and fined it another $350,000.

Why Does Osaic Wealth 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 Osaic Wealth Advisor Misconduct Cause You Investment Losses?

When financial advisor’s misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Osaic Wealth 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 Osaic Wealth 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 Osaic Wealth 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 Osaic Wealth 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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