• July 25, 2023
• Creative Planning

Wolper Law Firm, P.A. is investigating SEC Registered Investment Advisor (“RIA”), Creative Planning, and its options trader, Brandon Hanna.  Creative Planning is one of the country’s largest RIA firms.  According to its most recent Form ADV, it manages more than $130 billion in assets for more than 35,000 clients.  One subset of its business involves options trading, which is managed by a team led by Investment Advisor Representative (“IAR”) Brandon Hanna, who has been registered with the firm since 2017.

Since becoming registered with Creative Planning in 2017, Brandon Hanna has been the subject of three customer complaints.  Two of the customer complaints have resulted in arbitration awards, totaling $1.59 million and $4.76 million.  A third complaint, alleging damages of $10 million, remains pending.  A copy of Brandon Hanna’s publicly available CRD is available here.

The Wolper Law Firm has heard from clients of Creative Planning and Brandon Hanna, who have experienced investment loss as a result of options trading facilitated by Creative Planning and Brandon Hanna on a discretionary basis, meaning Creative Planning transacted without first having to contact the client.

Options trading is highly complex.  Creative Planning and Brandon Hanna purport to have expertise trading a variety of different options strategies, including but not limited to, covered call options on concentrated stock positions, option spreads and long call and put options.   However, prior to 2017, Brandon Hanna did not hold a securities or commodities license, allowing him to render investment advice, or purchase or sell securities on behalf of retail clients.

Each of the aforementioned options strategies involve unique risks which, if not properly managed, can lead to a loss of the underlying security (i.e., options assignment), financial loss and/or margin calls.  Moreover, because of the complex nature of options trading, explanation and illustration of these risks is required in order for the client to have a comprehensive understanding of the investment strategy.

Creative Planning is a RIA and Brandon Hanna is an Investment Advisor Representative.  Both owe fiduciary duties to their clients.  The SEC and courts across the country have interpreted the fiduciary duty standard imposed by the Advisers Act and have found that advisers owe both (1) a duty of care and (2) a duty of loyalty.  SEC v. Capital Gains, 375 U.S. 180 (1963).  The duties articulated in Capital Gains have been reaffirmed in the SEC’s most recent pronouncement regarding fiduciary standards.  The fiduciary duty standard is broad and applies to the entire adviser-client relationship.  The duty of care includes a duty to provide investment advice that is in the best interest of the client, including a duty to provide advice that is suitable for the client.  In order to provide such advice, an adviser must have a reasonable understanding of the client’s objectives which is a critical component of the duty of care.  Whether the advice is in the client’s best interest must be evaluated in the context of the portfolio that the adviser manages for the client and the client’s objectives.  The duty of care also encompasses the duty to provide advice and monitoring at a frequency that it in the best interest of the client, taking into account the client relationship.

The Investment Advisors Act of 1940 also imposes upon Creative Planning a duty to supervise its employees, including Brandon Hanna.  In order to discharge this responsibility, Creative Planning must have supervisory processes in place to monitor customer accounts and the trading therein.  Failure to properly supervise options trading or the disclosures made by its registered employees, including Brandon Hanna, may constitute a breach of fiduciary duty.

If you invested with Creative Planning or Brandon Hanna, and have experienced investment loss due to misconduct or a breach of fiduciary duty, you may be entitled to recover those 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 more than 1,000 securities cases during his career involving a wide range of products, strategies and securities, including cases involving options strategies.  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 mwolper@wolperlawfirm.com.