MML Investors Services

MML Investors Services (CRD #: 10409) (“MML”) was formed in 1981. MML Investors Services is the broker-dealer associated with MassMutual. It is registered as a broker-dealer in 53 United States and territories. According to FINRA, the firm has 1,409 branch offices and 7,300 registered representatives. Its headquarters is located in Springfield, Massachusetts. 

There are a total of 28 disclosures on the MML’S BrokerCheck record. This includes regulatory events and allegations that MML failed to supervise its representatives. Unsupervised brokers are a threat to investors because their recommendations are not being reviewed for compliance with securities regulations.

MML offers a variety of securities, including high-risk categories of investments, such as the following:

• Private placements 
• Variable annuities
• Oil and gas investments
• Put and call options

MML Investors Services also does business under the following names:

• Concorde Financial Advisors 
• The Establishment by MassMutual 
• The Establishment by Barnum Financial Group 
• The Establishment 
• MML Plan Solutions 
• MML Investors Services 
• Mass Mutual Financial Group 
• In Good Company
• HFG Advisors 

Regulatory Actions

The following disclosures are only the most recent disclosures. Investors who have questions can review the full list in the firm’s detailed BrokerCheck record. 

Failure to Supervise and Failure to Disclose Reportable Events 

There are two regulatory actions related to MML’s alleged failure to report their representatives’ disclosable events.

Disclosable events include the following: 

• Customer complaints 
• Arbitrations
• Criminal charges 
• Bankruptcies 
• Internal reviews and investigations
• Regulatory actions 

FINRA Fine for $250,000

On May 16, 2023, FINRA alleged that MML failed to amend its associated persons’ uniform applications and termination notices to report disclosable events.

FINRA offers settlements through Acceptance, Waiver, and Consent agreements (AWCs). These allow firms to resolve regulatory actions without lengthy litigation. As part of the terms of the Acceptance, Waiver, and Consent agreement, the firm consented to a $250,000 fine. 

The AWC also highlights the fact that MML paid a $300,000 fine in 2011 following an alleged failure to supervise their registered representatives and make required disclosures with Form U5 and Form U4 filings. 

FINRA Fine for $75,000

In June 2020, FINRA alleged that MML learned that an arbitration dispute had been filed against a former registered representative, alleging that the MML representative misrepresented and omitted material information. Misrepresentations and omissions violate FINRA Rule 2020. MML allegedly disclosed this arbitration 75 days late. 

The AWC further alleged that MML learned of felony charges against a representative involving fraudulent sales practices against another former representative. MML allegedly disclosed this information four months late. 

As part of the terms of his AWC, MML consented to a $75,000 fine.

Variable Annuities and Alleged Failure to Disclose Commissions

In August 2022, The State of Massachusetts alleged that MML Investors failed to supervise its brokers’ recommendations of variable annuities. The Consent Order alleges that MML failed to ensure that representatives properly informed their investors of the general terms of the investment, and failed to disclose the commissions the broker would receive in connection with the client’s purchase of variable annuities. 

MML was ordered to pay a $250,000 administrative fine, as well as a disgorgement of $12,092.39 in profits received in connection with its brokers’ variable annuity sales. Massachusetts further ordered MML to repay $33,837.95 to six clients to cover variable annuity surrender charges. 

529 Plan Share-Class Recommendations 

On December 20, 2021, MML Investors consented to the entry of findings that it failed to reasonably supervise brokers’ 529 plan share-class recommendations. Supervisors allegedly approved numerous 529 share class recommendations that did not take into account the beneficiary’s age. The firm also allegedly did not have reasonable supervisor procedures in place mutual fund and 529 plan transactions for available breakpoint discounts. “Breakpoints” are discounts offered when an investor purchases additional shares from a fund. 

As part of the terms of the Acceptance, Waiver, and Consent agreement, MML Investors agreed to pay restitution to customers in the amount of $617,726.28 plus interest. 

Failure to Supervise Brokers Posting About Securities on Social Media 

In September 2021, Massachusetts alleged that MML failed to supervise the broker-dealer’s posting about securities on social media, among other allegations. The State ordered sanctions in the form of a censure and a fine of $4,000,000. 

Brokerage Account Fees 

The Customer Relationship Summary (Form CRS) discloses the fees associated with MML investor services.

Stocks, bonds, and ETFs come with transaction-based fees. 

Other products feature ongoing fees for the brokerage firm:

• 529 plans 
• Exchange-Traded Funds
• Unit Investment Trusts (UITs)
• Variable annuities
• Variable universal life insurance
• Certain classes of mutual funds
• Trust services: There are ongoing trust referral fees paid to the MassMutual Trust Company

Conflicts of Interest 

Under Regulation Best Interest, MML Investors Services is required to disclose any potential conflicts of interest. Investors should feel comfortable asking their brokers a) how they make money, and b) what conflicts of interest they have.

• Certain issuers, including MML’s clearing firm, share the revenue that they earn from your investments or brokerage accounts. These payments incentivize MML representatives to offer their products and services. 
• MML pays its representatives a portion of the commissions and advisory fees the firm receives. This gives representatives the incentive to sell more investments and increase advisory account assets. 
• Because transactions come with a fee, MML Investors Services discloses that they have an incentive to encourage you to trade as often as possible. 
• Financial professionals are required to meet minimum sales thresholds of MassMutual annuity and insurance products. 
• Sales of MassMutual variable insurance products count towards brokers’ Mass Mutual health and retirement benefits as well as rewards and trips. 
• Brokers may receive gifts and entertainment from product issuers. The issuer may also pay their travel expenses for educational or business meetings. 

Investor Complaints Concerning MML Brokers

Conflicts of interest may have led to investor complaints concerning annuities and private placements. 

• Investors have alleged they lost money with an MML broker following alleged misrepresentation or omission of information concerning annuities. 
• Another investor alleged that an MML broker recommended unsuitable private securities. 
• In November 2023, an investor alleged that an MML broker misrepresented that a variable life insurance policy would pay dividends for the life of the policy and that the dividends would be used to pay the loans against the policy. The investor alleged that this did not happen and that the policy is now useless. 

What Can I Do If I Lose Money with an MML Broker? 

If you lost money with an MML broker, you may consider pursuing FINRA arbitration. Kurta Law securities attorneys provide free case evaluations and work on contingency, meaning they only collect a fee once they win a settlement or FINRA award on your behalf. Contact (877) 600-009 or info@kurtalawfirm.com today.