Royal Alliance Reps Embroiled in $250,000 Investor Complaint

Thomas Rydell (CRD# 5020102[1]) and Ron Phillips (CRD# 2823393[2]) are embroiled in a customer complaint alleging their actions caused six figure damages. This information is according to their Financial Industry Regulatory Authority (FINRA) BrokerCheck reports, accessed on November 27, 2021. Those records show that Rydell is currently a broker and investment adviser registered with Royal Alliance Associates in Milpitas, California, while Ron Phillips is registered with Morgan Stanley in Walnut Creek, California.

Customer: Rydell and Phillips’ Mismanaged Account

FINRA[3] records show a pending complaint involving both Thomas Rydell and Ron Phillips. In October 2021 a customer alleged their management of his Morgan Stanley accounts “was not in his best interest.” The customer is seeking $250,000 in damages in the pending complaint.

Understanding Fiduciary and Suitability Obligations

Various securities industry rules and standards govern investment managers’ obligation to act in their customers’ best interests. The Securities and Exchange Commission, for instance, lays forth an investment manager’s fiduciary duty[4] to “serve the best interest of its client and not subordinate its client’s interest to its own.” Meanwhile FINRA’s suitability[5] standard requires brokers to have a reasonable basis to believe that the transactions and strategies they recommend are suitable for the customer’s particular needs and objectives. Brokers and firms can determine whether their recommendations are suitable by considering the investor’s unique investment profile, which takes into account such factors as income, net worth, age, risk tolerance, investment horizon, investment experience, and more. More information on the rules and guidance governing these standards is available via the SEC[6] and FINRA[7].

FINRA: Previous Complaints Against Ron Phillips Reached Settlements

FINRA records show two other customer complaints involving Ron Phillips that ended with settlements paid to the customer. One such complaint was filed in 2008 and concerned investments in auction rate securities prior to the industry-wide liquidity collapse in the auction rate securities market. Phillips’ former member firm agreed to repurchase the securities from the customers at par value, or $575,000. The other complaint was filed in 2003 and detailed allegations that he recommended unsuitable mutual fund investments. It settled for $13,400.

Rydell and Phillips Are Associated with Royal Alliance

According to FINRA, Thomas Rydell’s 16 years of securities industry experience began in 2005, when he joined UBS Financial Services in Walnut Creek, California as a broker and an investment adviser. He moved to Morgan Stanley’s Walnut Creek office in 2008, where he remained until he joined Royal Alliance Associates in Milpitas, California in 2018. He currently holds eight state licenses and has passed three securities industry examinations. More information about his registration history and the pending customer complaint involving him is available via his BrokerCheck report[8].

Ron Phillips’ 25 years of securities industry experience began when he joined Salomon Smith Barney in 1996. Originally registered with the firm’s office in New York City, he later registered with its Pleasanton, California office as an investment adviser. In 2002 he joined UBS Financial Services in Walnut Creek; in 2008, he moved to Morgan Stanley’s office in the same city, where he has remained since. FINRA records show that he currently holds 28 state licenses and has passed four securities industry examinations. More information about his registration history, including the customer complaints involving his conduct, is available via his BrokerCheck report[9]. (The above-referenced information was accessed on November 27, 2021.)

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