AStrongest tier80/100FDD 2026
Ameriprise Financial Services, LLC Independent Advisor Business: Litigation & Risk
Financial Services · FDD Items 3, 4 & 5
Elevated Risk
7 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 7
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 80 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 473
- Government-backed loans issued
- Charge-off rate
- 0.3%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 1 loans
- Loans charged off or defaulted
- Total loan volume
- $301.5M
- Avg loan size
- $637K
- Participating lenders
- 31
FDD Items 5, 6 & 17: What You Give Up
Contract Risk Indicators
- Mandatory arbitration
- Required
- Disputes resolved outside court, limits your legal options
- Jury trial waiver
- Waived
- You give up the right to a jury trial
- Non-compete
- 1 yrs
- Post-termination restriction on similar businesses
- Franchisor can compete
- Yes
- Franchisor can open competing locations in or near your territory
- Right of first refusal
- Yes
- Franchisor can match any purchase offer when you try to sell
- Governing law
- DE
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Franchisor is defendant in multiple pending matters including cash sweep class actions (Mehlman/Tripson consolidated), FINRA arbitrations by current/former advisors (Mattson), collection matters (Urban), recruiting-related cases (Oppenheimer, Edward Jones). Past SEC/FINRA settlements: $4.5M (2018 safeguarding), $8.75M total disgorgement+penalty (2017 F-Squared), $850K fine (2016 FINRA wire transfer). Field sales force and advisor client litigation of 5-60 matters/year disclosed as routine.
What drove the 80/100 verdict
Risk Score Breakdown
- 01MINORDeclining unit count (-3.0% YoY) signals shrinking franchisee base and potential market saturation or dissatisfaction
- 02MINORExtremely wide royalty range (9-28% of GDC) lacks transparency; unclear what determines placement and actual franchisee take-home
- 03HIGHSix active litigation matters including class action, FINRA arbitration, and three regulatory settlements indicate systemic compliance failures in supervision and advertising
- 04MEDNo average net income disclosed despite $3.07M average revenue — suggests marginal profitability or franchisor unwilling to disclose poor performer data
- 05MINORUnprotected territory creates direct competition risk from other franchisees and company-employed advisors
- 06MINORLow franchise fee ($1,500) and high investment range suggests upfront capital may be understated or variable costs are substantial
- 07MINORThree-year term is short; renewal risk and franchisor control leverage are high
- 08MINORRecent SEC/FINRA settlements indicate franchisor's own regulatory compliance deficiencies that cascade to franchisees
Severity inferred from FDD text. Not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice. Consult a franchise attorney before signing any franchise agreement.