Robert Hillard Allegedly Made Unsuitable Variable Annuity Recommendations
The White Law Group is investigating potential securities claims involving financial advisor Robert Hillard.
Broker Robert Hillard of Arlington Securities was reportedly the subject of an AWC (Acceptance, Waiver, and Consent) for violations of FINRA Rules 2330(b), 2111, and 2010 on December 11th, 2024. Without admitting or denying the findings, Hillard and his member firm reportedly consented to the sanctions and to the entry of findings that Hillard recommended 14 customers liquidate their lower-cost Class A and Class C mutual funds to purchase higher-cost investment-only variable annuities without a reasonable basis for believing the transactions were suitable.
The findings noted that when previously sold Class C mutual funds began converting to Class A shares—resulting in reduced fees for customers and a significant decrease in Hillard’s trailing commissions—Hillard reportedly expected further conversions would continue to lower his income.
In response, he reportedly recommended the switch to higher-cost annuities that charged additional fees, increasing his compensation but collectively costing his clients an additional $67,026.47 in annual fees. These recommendations were reportedly supported by nearly identical written justifications, failing to account for each customer’s unique financial profile.
What Is Variable Annuity Switching—and Why Investors Should Be Cautious
When financial professionals recommend investments, they are supposed to act in their clients’ best interests. But sometimes, that doesn’t happen.
Variable annuity switching is one form of misconduct where a broker or adviser convinces a customer to move money from one investment—such as a mutual fund or another annuity—into a new variable annuity. These switches often come with higher fees, new commissions, and no clear benefit to the investor. If the motivation is personal gain rather than the client’s financial goals, that’s a red flag.
Supervisory Failures
According to FINRA, the firm’s supervisory system, including its Written Supervisory Procedures (WSPs), was not reasonably designed to ensure compliance with FINRA’s suitability requirements. The WSPs lacked adequate guidance on reviewing the suitability of mutual fund liquidations and annuity purchases, did not identify red flags or assess alternatives such as cost-free fund exchanges, and failed to consider the impact of decreasing fees due to Class C-to-A share conversions.
Robert Hillard Regulatory Sanctions
As a result, the Missouri Securities Division suspended Hillard’s registration as a broker-dealer agent and investment adviser representative for two months, from March 4, 2025, to May 5, 2025, concurrent with his FINRA suspension. During this period, he was barred from receiving any form of compensation from broker-dealers or investment advisers. Hillard also reportedly agreed to pay a $10,000 monetary penalty to the Missouri Investor Education and Protection Fund and is permanently enjoined from engaging in further violations of Section 409.4-412 of the Missouri Securities Act.
FINRA BrokerCheck: Robert Hillard
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
According to FINRA, Robert Hillard has been reportedly registered with ARLINGTON SECURITIES, INC. (CRD#:19596) since 1990. He reportedly has a history of misconduct including seven (7) regulatory actions on his report, including censures, fines, suspensions, and cease and desist/injunctions. He has one customer complaint filed against him. Allegations include “VIOLATION OF FLORIDA STATUTES, BREACH OF FIDUCIARY DUTY, NEGLIGENCE, BREACH OF CONTRACT.”
Failure to Supervise
All broker-dealers have a responsibility to adequately supervise their advisors. They must ensure they have procedures and systems in place to detect broker misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit
You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration case. The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option. Class action lawsuits as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.
FINRA Lawsuits
If you have suffered investment losses with Robert Hillard and Arlington Securities, the securities attorneys at the White Law Group may be able to help you by filing a FINRA lawsuit. Please call our offices at (888) 637-5510 for a free consultation. We take cases in all 50 states including Missouri.
National Securities Attorneys
The White Law Group, LLC is a national law firm in securities fraud, securities arbitration, investor protection, and securities regulation and compliance. With offices in Chicago, Illinois and Seattle, Washington, the firm is dedicated to assisting investors across all 50 states with claims against their brokerage firms. Since its founding in 2010, The White Law Group has handled over 800 FINRA arbitration cases.
Last modified: May 6, 2025
