- February 28, 2021
- Ameriprise Financial Services
Kevin Houser (CRD#: 2513167) was an Investment Advisor at Ameriprise Financial Services, LLC in Center Valley, PA. He entered the securities industry in 1994 and previously worked for LPL Financial, LLC; Wachovia Securities, LLC; Citigroup Global Markets, Inc.; and Merrill Lynch, Pierce, Fenner & Smith, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in November 2020, a customer complaint against Kevin Houser was received, alleging unsuitability. The complaint states, “CLAIMANT ALLEGES THAT HE INVESTED IN FRANKLIN SQUARE BDC, COLE CREDIT PROPERTY TRUST IV, AND CIM REIT UPON HIS BROKER’S MISLEADING RECOMMENDATION, WHICH DID NOT SUIT HIS ALLEGEDLY CONSERVATIVE INVESTMENT PROFILE. ACTIVITY PERIOD: 7/2013 TO 2/2014.” The complaint remains pending.
The investments that are the subject of this complaint are non-traded real estate investment trusts (“Non-Traded REITS”) and business development companies (“BDCs”). Non-traded REITs do not trade a public securities exchange. For this reason, Non-Traded REITs can be illiquid, meaning investors may be unable to sell their investments on demand. Typically, the commissions generated on Non-Traded REITs are higher than industry norm and may be subject to extreme volatility due to associated risk factors. Non-Traded REITs are only suitable for investors with a long-term investment horizon who are willing to accept higher levels of risk in their investments. Financial Advisors have been increasingly recommending Non-Traded REITs because they generate higher commissions for Financial Advisors that more traditional investment vehicles. FINRA has issued notices regarding the sale of Non-Traded REITs due to their speculative characteristics and the investing public’s lack of understanding of said characteristics and risks.
In addition, Kevin Houser has been the subject of three customer complaints, all of which remain pending, including the following:
● November 2020 — “Claimants allege that they invested in Franklin Square BDC, Cole Credit Property Trust IV, and CIM REIT upon their broker’s misleading recommendation, which did not suit their allegedly conservative investment profile.” The complaint requests $292,000 in damages.
● July 2020 — “CLAIMANTS ALLEGE THAT THEY INVESTED IN FRANKLIN SQUARE BDC’s AND AXA ANNUITIES UPON THEIR BROKER’S MISLEADING RECOMMENDATION, WHICH DID NOT SUIT THEIR ALLEGEDLY CONSERVATIVE INVESTMENT PROFILE. ACTIVITY PERIOD: 12/2015 TO PRESENT.” Damages of $300,000 are requested.
● November 2016 — “SUITABILITY.” Damages of 687,661 are sought.
For a copy of Kevin Houser’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
FINRA has defined the standards in which investment recommendations made by brokerage firms and registered financial advisors are evaluated. The FINRA suitability rule focuses on three fundamental concepts: (1) reasonable basis suitability, (2) quantitative suitability, and (3) customer-specific suitability.
● Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
● Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
● Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, other investments, financial situation and needs, tax status, and investment objectives. Other considerations include the customer’s time horizon, liquidity needs, risk tolerance, and any other information disclosed by the customer.
Failure by a financial advisor to adhere to these requirements is evidence of negligence or, worse, investment fraud. If you as the investor can establish, at a minimum, negligent misconduct, you may be entitled to recover your investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.