What Investors Should Know About Customer Advisory Centers

Customer Advisory Centers vs. Call Centers

Although they sound similar, customer advisory centers differ from call centers in several important ways. Securities firms and investment broker-dealers typically rely on call centers to handle basic customer service issues and administrative functions. They do not provide investment or trading advice, nor do they earn commissions on trades and deals.
Customer advisory centers, meanwhile, are call centers staffed by securities professionals. They are able to provide trade and investment advice as well as sell securities services.
A customer advisory center is typically designated to clients with:

  • Portfolios under $100-250,000
  • No current assigned broker-dealer

What Investors Need to Know

Customer advisory centers can be a useful resource for securities firms and investors alike. Securities firms can refer casual investors to a center that can handle general investment questions and services while focusing dedicated broker-dealers and advisors on more diversified or high-level investors. Alternatively, they can help investors facilitate transactions and order services without meeting with advisors.
Despite the benefits, customer advisory centers do pose certain risks that investor should know about.
Customer advisory centers are generally set-up to offer center brokers incentives for selling certain securities and brokerage services. This may give way to practices that may not be within investors’ best interest. Investors should be wary of:

  • Aggressive sales tactics promoting certain products and services
  • Attempts to gather irrelevant customer information
  • The promotion of “no fee” or “no cost” goods and services
  • Information that is misrepresented or omitted in advice or contracts
  • Failure to disclose complete cost brackets for goods and services

Investor Resources

For more information on customer advisory centers, check out this FINRA advisory bulletin.
If you believe you have received misrepresented information or inaccurate investment advice from a customer advisory center that has resulted in improper fees or investment loss, contact Savage Villoch Law, PLLC to find out potential recovery options.

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