As a former financial advisor and legal expert with over a decade of experience in both sectors, I’ve seen my fair share of investor complaints and unsuitable investment recommendations. The recent allegations against Jeffrey Bangerter, a Roseville, California-based financial advisor, are serious and warrant careful examination.
According to FINRA records, Mr. Bangerter has been the subject of two investor complaints in the past year. The most recent complaint, filed in December 2024, alleges that he recommended unsuitable investments and breached his fiduciary duty while working as a representative of Concorde Investment Services. The pending complaint alleges damages of $85,000.
A second complaint, filed in January 2024, claims that Mr. Bangerter recommended unsuitable investments involving an interval fund and a Perpetual REIT while representing Bangerter Financial Services. This pending complaint alleges damages of $20,000.
The Seriousness of Unsuitable Investment Allegations
Unsuitable investment recommendations are a grave matter in the financial industry. When a financial advisor recommends investments that are not appropriate for a client’s risk tolerance, financial goals, or overall situation, it can lead to significant losses and financial harm. Some key points to understand about unsuitable investments:
- Financial advisors have a fiduciary duty to act in their clients’ best interests
- Unsuitable recommendations breach this duty and can be grounds for legal action
- Investors who suffer losses due to unsuitable investments may be entitled to recover damages
As the famous investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” When financial advisors fail to properly assess and consider their clients’ needs, they put investors at undue risk.
Jeffrey Bangerter’s Background and Broker-Dealer
Mr. Bangerter has been in the securities industry for 32 years and is currently registered as a broker with Concorde Investment Services and as an investment advisor with Concorde Asset Management. He operates under the business name Bangerter Financial Services.
Prior to his current affiliations, Mr. Bangerter was registered with several other firms, including:
- Berthel Fisher & Company Financial Services
- DFPG Investments
- GF Investment Services
- Multi-Financial Securities Corporation
He currently holds 51 state licenses. You can find more detailed information about his registration history and the pending complaints on his FINRA BrokerCheck report.
Understanding FINRA Rules and Suitability
FINRA, the Financial Industry Regulatory Authority, is responsible for regulating the securities industry and protecting investors. One of the key rules financial advisors must follow is the suitability rule, which requires them to have a reasonable basis for believing that an investment recommendation is suitable for a particular customer.
Factors that advisors must consider when determining suitability include:
- The customer’s age, financial situation, and needs
- The investment’s characteristics, including potential risks and rewards
- The customer’s investment experience and risk tolerance
When advisors fail to adhere to these guidelines, they can face disciplinary action from FINRA and legal action from wronged investors.
The Consequences of Unsuitable Investment Advice
The consequences of unsuitable investment recommendations can be severe for both investors and advisors. Investors may suffer substantial financial losses, derailing their retirement plans or other financial goals. They may also experience emotional distress and a loss of trust in the financial industry.
For advisors, the consequences can include disciplinary action from regulators, legal action from investors, and damage to their professional reputation. In some cases, they may even face criminal charges if their actions are found to be particularly egregious.
It’s worth noting that 7.8% of financial advisors have at least one disclosure on their record, according to a 2021 study by AdvisorHub. While not all disclosures indicate wrongdoing, it underscores the importance of thoroughly researching an advisor’s background before entrusting them with your financial well-being.
The allegations against Jeffrey Bangerter serve as a reminder of the critical role that suitability plays in the financial advisory industry. Investors must remain vigilant, ask questions, and thoroughly vet potential advisors. By staying informed and proactive, investors can help protect themselves from unsuitable investment recommendations and the harm they can cause.