We previously published two papers ranking brokerage firms based on the complaint history associated with their current brokers and the complaints associated with brokers who they employed
at the time of the conduct being complained about, wherever those brokers are currently employed.
We recently updated our analysis of complaints against brokerage firms and found that our earlier results were extremely useful for identifying brokerage firms likely to harm investors in the future.
Based on our research, investors should be warned against being clients of
Centaurus Financial
Aegis Capital
Western International Securities
Independent Financial Group
Berthel Fisher
Crown Capital
Calton
JW Cole
United Planners
Money Concepts
Kovac Securities
Oppenheimer
Cetera
Wedbush, and
Triad Advisors
Table 1 excerpts our results based on resolved complaints against firms' current brokers as of July 17, 2017, whether the conduct occurred at the firm or at a previous employer. Under this measure,
the top 5 highest risk brokerage firms in the country were Aegis Capital, Newbridge Securities, Western International Securities, National Securities and Summit Brokerage Services.
Table 1 Worst Firms by Current Broker's History of Resolved Complaints, July 17, 2017
Table 2 excerpts our results based on resolved complaints over conduct occurring at each firm, whether the broker assigned to the account when the investment loss occurred was still currently
employed by the firm as of July 17, 2017. Under this measure, the top 5 highest risk brokerage firms in the country were Newbridge Securities, Berthel Fisher, Sigma Financial, Santander and
National Securities.
Table 2 Worst Firms by Firms' Histories of Resolved Complaints, July 17, 2017
Table 3 excerpts our results based on pending complaints, which are indicative of recent trends in compliance and investment outcomes at brokerage firms. We define pending ratio as the ratio of
the number of pending complaints filed against brokers employed by the firm over the number of brokers employed by the firm as of July 17, 2017. Under this measure, the top 5 highest risk brokerage
firms in the country were Santander, Newbridge Securities, Berthel Fisher, UBS and National Securities.
Table 3 Worst Firms by Current Broker's History of Pending Complaints, July 17, 2017
Santander and UBS's rankings increased from Table 1 (resolved complaints) to Table 3 (pending complaints) because the 2017 data included thousands of pending complaints related to their role in
investor losses in Puerto Rico municipal bonds.
Averaging the firms' ranking across Tables 1, 2 and 3, the fifteen highest risk firms are listed in Table 4.
Table 4 Overall Worst Fifteen Firms, July 17, 2017
Ranking Brokerage Firms Based on 2018-2023 BrokerCheck Disclosures
We repeat our previous brokerage firm rankings using BrokerCheck disclosures from 2018 to 2023. We exclude the remaining complaints related to the 2013 collapse of Puerto Rico municipal bonds to
focus on filings more likely related to recent conduct. We also reduce the threshold number of brokers from 300 to 200 because some of the firms on our 2017 list of high risk firms shrunk below
the 300 broker threshold.
Summary statistics across the 276 brokerage firms which employed more than 200 brokers as of December 31, 2023 are reported in Table 5.
Table 5 Summary Statistics, December 31, 2023
Table 6 updates our results based on resolved complaints against firms' current brokers as of December 31, 2023. Under this measure, the top 5 highest risk brokerage firms in the country were
Arete Wealth Management, Aegis Capital, Centaurus Financial, Madison Avenue Securities and Western International Securities. The brokers which each of the top 7 firms employ have
resolved customer complaints at more than 10 times the 0.53% average of all firms with more than 200 brokers reported in Table 5.
Table 6 Worst Firms by Current Broker's History of Resolved Complaints, December 31, 2023
Table 7 updates our results based on resolved complaints over conduct occurring at each firm, independent of whether the broker assigned to the account at the time was still employed by the firm as of
December 31, 2023. Under this measure, the top 5 highest risk brokerage firms in the country were Centaurus Financial, Aegis Capital, Western International Securities, National Securities and Berthel Fisher.
Table 7 Worst Firms by Firms' Histories of Resolved Complaints, December 31, 2023
Table 8 updates our results based on pending complaints against firms' current brokers as of December 31, 2023. Under this measure, the top 5 highest risk brokerage firms in the country were
Centaurus Financial, Aegis Capital, Arete Wealth Management, Western International Securities and Great Point Capital. The brokers which 13 of the top 14 firms in Table 8 employ have pending
customer complaints at more than 10 times the 0.29% average of all firms with more than 200 brokers reported in Table 5.
Table 8 Worst Firms by Current Broker's History of Pending Complaints, December 31, 2023
Averaging the firms' ranking across Tables 6, 7 and 8, the fifteen highest risk firms as of December 31, 2023 are listed in Table 9.
Table 9 Overall Worst Fifteen Firms, December 31, 2023
Discussion
The rankings in Tables 6-9 are based only on resolved and pending complaints filed in the six years since our 2017 studies. With few exceptions, the worst firms as of 2017 remain the worst firms today.
Newbridge fell off all the lists because it employed 156 registered brokers as of 12/31/2023 and an average of 197 brokers over 2018-2023.
Summit Brokerage services deregistered in 2019.
Sigma financial fell off the lists because it had only 9 resolved cases and 3 pending cases filed between 2018 and 2023. In contrast, it had 92 resolved cases filed between 2012 and 2017 and that's
why it topped the previous lists.
Investors should be advised to avoid the brokerage firms listed in Table 9.
