Avantax Investment Services, Inc. has a long history of regulatory issues, investor complaints, and supervisory failures. The firm, which operates as a full-service independent broker-dealer, has been censured and fined millions of dollars by the SEC, FINRA, NASD, and state regulators.
If you or someone you know has suffered significant investment losses working with Avantax or another brokerage firm, don’t hesitate to reach out to Meyer Wilson Werning today. Our attorneys are experienced in securities fraud cases and will help to guide you through the process with a free consultation to determine whether your losses are the result of actionable misconduct.

What Is Avantax Investment Services?
Avantax Investment Services (CRD #: 13686) is a registered broker-dealer that offers a wide range of financial products and advisory services to individual investors and financial advisors. Like other broker-dealers, it is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Because Avantax operates under an independent broker-dealer model, its financial advisors often run their practices as separately incorporated businesses. This structure gives them flexibility but also increases risks for clients when supervision is weak. Regulatory authorities have repeatedly disciplined Avantax for failing to properly oversee its advisors, leaving investors exposed to misconduct.na
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A Pattern of Regulatory Problems
Avantax’s regulatory history includes 16 disclosure events as well as hundreds of customer complaints. Many of these cases involve supervisory lapses that allegedly allowed advisors to mislead or disadvantage clients.
Some of the most notable regulatory actions include:
SEC Sanctions for Supervision Failures
The SEC ordered Avantax to cease and desist after finding it failed to supervise a representative who misappropriated client funds. The firm also failed to perform required reserve calculations, maintain customer funds properly, and preserve emails as required under books-and-records rules.
NASD Fine of $4 Million for Rule Violations
Avantax was fined more than $4 million for violations involving directed brokerage in mutual fund sales, unequal weighting in sales contests, and failures in recordkeeping and supervisory requirements tied to non-cash compensation.
NASD Censures Over Mutual Fund Breakpoints
The NASD determined Avantax failed to provide breakpoint discounts in 33.39% of eligible mutual fund transactions in 2001 and 2002, costing investors at least $725,000 in unnecessary charges.
FINRA Sanctions for Overcharging Charitable and Retirement Accounts
FINRA found that Avantax disadvantaged retirement plan and charitable organization clients by failing to apply sales-charge waivers. The firm overcharged these investors by roughly $219,930, and also failed to establish adequate policies or training to prevent such overcharges.
These regulatory events are only a fraction of Avantax’s disciplinary record. Other disclosures involve NASAA and state-level securities regulators, underscoring the widespread concerns about its compliance culture.
Why Avantax has these Problems
Avantax’s trouble may stem from the independent broker-dealer model. While this approach allows the firm to expand nationally by opening small offices run by independent contractors, it also can create supervisory challenges:
- Remote Oversight: Supervisors at Offices of Supervisory Jurisdiction (OSJs) often work in geographically distant offices and may be responsible for multiple advisors spread across states.
- Conflicted Supervisors: Many OSJ managers run their own businesses, meaning supervision is not their full-time role. This reduces the quality of oversight and increases the chance of missed red flags.
- Limited Compliance Reviews: Many branch offices only undergo a compliance audit once per year. That leaves long gaps when misrepresentations, signature forgeries, or inaccurate client profiles can go undetected.
- Weak Daily Controls: Unlike full-service firms, independent broker-dealers often lack daily review systems for transactions, correspondence, or new account documentation.
The North American Securities Administrators Association (NASAA) has repeatedly warned that this model leads to higher rates of sales abuse and investor harm compared to traditional firms with stronger branch-level compliance.
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What This Means for Investors
For investors, Avantax’s regulatory history shows the risks of dealing with firms that fail to adequately supervise advisors. Problems such as:
- Overcharging on mutual funds.
- Failing to deliver promised discounts.
- Allowing misappropriation of client funds.
- Not applying appropriate fee waivers.
These are not isolated errors but recurring failures across multiple years and regulatory actions. Investors who trusted Avantax advisors may have paid excessive fees, purchased unsuitable products, or been exposed to misconduct that stronger supervision should have prevented.
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How Meyer Wilson Werning Helps Avantax Investors
Avantax’s disciplinary history shows how supervisory lapses harm investors. At Meyer Wilson Werning, we represent individuals who have suffered losses due to firms like Avantax failing in their duty to supervise.
If you experienced losses tied to mutual fund overcharges, unsuitable recommendations, or advisor misconduct at Avantax, we can help you pursue recovery through arbitration. Our team has decades of experience holding broker-dealers accountable when their systems and oversight fail to protect clients. Contact us today for a free consultation.
Frequently Asked Questions

Why has Avantax Investment Services faced so many regulatory fines and sanctions?
Avantax has been fined millions by the SEC, FINRA, NASD, and state regulators for supervisory failures and compliance violations. These repeated actions may highlight systemic problems with oversight across the firm.
How does Avantax’s independent broker-dealer model create risks for investors?
Because Avantax relies on independent contractors, its advisors often operate with limited daily supervision. This structure makes it easier for misconduct or unsuitable recommendations to go undetected.
Has Avantax been disciplined for overcharging retirement or charitable accounts?
Yes, FINRA sanctioned Avantax for failing to apply sales-charge waivers, causing about $219,930 in overcharges. Regulators also found the firm lacked adequate policies to prevent such errors.
What legal options do investors have if they lost money with Avantax?
Most investors are required to pursue recovery through FINRA arbitration. With evidence of unsuitable advice or supervisory failures, investors may be able to recover losses.
Recovering Losses Caused by Investment Misconduct.