Avantax Investment Services Review: Regulatory Sanctions

Avantax Investment Services Review:  Regulatory Sanctions and Broker Misconduct

In a new regulatory action dated February 20, 2026, the Financial Industry Regulatory Authority (FINRA) reportedly censured and fined Avantax Investment Services $200,000 for supervisory failures involving custodial accounts for minors. According to FINRA, from January 2019 through August 2023, Avantax failed to establish and maintain a supervisory system—and failed to establish, maintain, and enforce written supervisory procedures (WSPs)—reasonably designed to comply with FINRA Rule 2090 (Know Your Customer).

The White Law Group reviews the regulatory history of Avantax Investment Services (formerly HD Vest Investment Services).

About Avantax Investment Services

Avantax Investment Services (CRD#: 13686 / SEC#: 8-29533), headquartered in Dallas, Texas, is a mid-sized broker-dealer offering brokerage and investment advisory services. The firm has operated under several names, including:

• 1st Global

• HD Vest Investment Services

• HD Vest

• Avantax Wealth Management

• Avantax Investment Services

HD Vest Financial Services reportedly rebranded with 1st Global to become Avantax Wealth Management on September 16, 2019.

In November 2023, Cetera Financial Group reportedly acquired Avantax in a cash deal valued at approximately $1.2 billion, making Avantax a private company and division of Cetera.

Avantax Investment Services: Regulatory Actions

Regulatory actions against broker-dealers may include censures, fines, suspensions, and restitution. These actions can significantly impact a firm’s compliance profile and investor confidence.

According to public records, Avantax Investment Services has approximately 21 disclosure events, including regulatory matters and arbitration disclosures.

February 2026 – FINRA Censure and $200,000 Fine (UTMA Supervisory Failures)

FINRA found that from 2019 to 2023, Avantax failed to implement supervisory systems and WSPs designed to comply with FINRA Rule 2090’s “reasonable diligence” requirement.

The firm allegedly did not adequately monitor changes in custodial authority in UGMA/UTMA accounts, potentially allowing individuals without proper authority to effect transactions on behalf of minor beneficiaries. FINRA concluded that Avantax violated:

• FINRA Rule 2090 (Know Your Customer)

• FINRA Rules 3110(a) and 3110(b) (Supervision)

• FINRA Rule 2010 (Standards of Commercial Honor)

Avantax agreed to a censure and a $200,000 fine.

August 2023 – Maine Fine

Avantax was reportedly fined $5,000 by Maine securities regulators for failure to conduct on-site branch inspections.

September 2022 – Vermont Fine

Vermont regulators reportedly fined Avantax $60,000 for supervisory failures related to a representative’s outside business activities and failure to maintain adequate written supervisory procedures.

November 2016 – Mutual Fund Overcharges

FINRA censured Avantax and ordered restitution of approximately $261,905 to customers who were allegedly overcharged on mutual fund transactions.

July 2016 – Supervisory Failures and Variable Annuity Oversight

FINRA reportedly censured and fined HD Vest $100,000 for supervisory failures, including failure to update Forms U4, failure to timely report complaints, and inadequate oversight of variable annuity transactions.

January 2013 – NASD and FINRA Violations

HD Vest was censured and fined $50,000 for failing to appropriately respond to disclosure letters from FINRA’s Central Registration Depository, allowing statutorily disqualified individuals to associate with the firm.

Broker Misconduct and Customer Complaints

Broker-dealers have a legal obligation to supervise their registered representatives. Failure to supervise can expose investors to unsuitable investments, excessive risk, or fraudulent conduct.

April 2019 – Bar of Former HD Vest Broker

FINRA barred former broker Thomas H. Laws for refusing to testify in an investigation concerning undisclosed business activities and private securities transactions. The SEC also investigated him in connection with alleged misappropriation of investor funds.

June 2019 – Unsuitable Energy Sector Recommendations

An HD Vest broker in Waco, Texas, was suspended for 18 months and fined $20,000 after FINRA found he made unsuitable investment recommendations, including overconcentrating retirement accounts in speculative oil and gas securities and recommending a leveraged inverse ETN intended for short-term holding. Customers reportedly suffered over $407,000 in losses.

What Do the 2026 UTMA Supervisory Failures Mean for Investors?

UGMA and UTMA accounts are designed to protect assets for minors. Proper monitoring of custodial authority is critical because:

• Custodians may lose authority when a minor reaches the age of majority.

• Unauthorized individuals should not have trading authority.

• Firms must exercise “reasonable diligence” to confirm essential customer facts.

Supervisory breakdowns in these areas can create compliance risks and potential harm to beneficiaries.

Potential Lawsuits to Recover Investment Losses

The White Law Group represents investors in FINRA arbitration claims against brokerage firms nationwide. If you suffered investment losses due to:

• Failure to supervise

• Unsuitable investment recommendations

• Unauthorized trading

• Misrepresentation

• Selling away

You may be able to pursue recovery through FINRA arbitration.

Class Action vs. Individual FINRA Arbitration

For larger losses (often exceeding $100,000), an individual FINRA arbitration claim is typically more effective than a class action. Class actions are generally better suited for large groups of investors with relatively small individual claims.

How to Recover Investment Losses from Avantax Investment Services

If you suffered losses investing with Avantax Investment Services or a former HD Vest broker, contact The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud and investor protection law firm representing clients in all 50 states. Since 2010, the firm has handled more than 800 FINRA arbitration cases. With offices in Seattle, Washington and Chicago, Illinois, the firm represents investors in claims involving broker fraud, unsuitable investments, churning, misrepresentation, unauthorized trading, and supervisory failures.

Frequently Asked Questions (FAQs)

1. Why did FINRA fine Avantax Investment Services in February 2026?

FINRA fined and censured Avantax for failing to maintain supervisory systems and written supervisory procedures designed to comply with FINRA Rule 2090. The firm allegedly failed to properly track and monitor custodial authority in UGMA and UTMA accounts from 2019 to 2023.

2. What is a UTMA or UGMA account?

UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts are custodial investment accounts established for minors. A custodian manages the assets until the beneficiary reaches the age of majority. Brokerage firms must ensure that only authorized custodians effect transactions.

3. Can I file a claim against Avantax Investment Services?

If you suffered financial losses due to unsuitable recommendations, supervisory failures, or other broker misconduct involving Avantax or its registered representatives, you may be eligible to file a FINRA arbitration claim. Speaking with a securities fraud attorney can help you understand your legal options.