Transamerica Financial Advisors, Inc. Review

Transamerica Financial Advisors, Inc. is a dually registered investment advisory firm and broker-dealer headquartered in Florida. The firm provides products and investment portfolios for financial professionals who want to open their own business as an investment advisor. It has nearly 1,200 advisors throughout the country who provide investment management, retirement plan services and brokerage services through Transamerica Financial Advisors.

Assets under management: $2,070,956,104

Minimum investment: Varies by program, starting at $10

Individual investor to advisor ratio: 44:1

Fee structure: A percentage of AUM, commissions

Headquarters: 570 Carillon Parkway St. Petersburg, FL 33716 Website: www.tfaconnect.com Phone: (727) 299-1800, ext.123-2080

All information included in this profile is accurate as of January 21, 2022. For more information, please consult Transamerica Financial Advisors’ website.

Overview of Transamerica Financial Advisors

Transamerica Financial Advisors is part of Transamerica, a large insurance and brokerage company that launched out of San Francisco. The company launched Transamerica Financial Advisors in 1984, which registered as an RIA with the U.S. Securities and Exchange Commission (SEC) in 1991. Today, the firm is owned by Aegon N.V., a multinational financial services company.

Transamerica has nearly 1,200 employees and all work in an advisory capacity. The firm also has over 3,000 independent registered representatives who are not formal employees, as those who want to open their business as an investment advisor can sign up with Transamerica to offer their insurance and financial products.

While the firm’s headquarters are in St. Petersburg, Fla., its advisors work across the country. The team currently oversees nearly $2.1 billion in assets under management (AUM).

What types of clients does Transamerica Financial Advisors serve?

The vast majority of the firm’s clients are non-high net worth individuals (for reference, the SEC defines someone as high net worth when they have at least $750,000 under management with an advisor or a total net worth of at least $1.5 million.) It takes a minimum opening deposit of just $10 to open some investment accounts, so they are accessible for any type of investor.

However, the firm works with high net worth individuals as well, and they make up a decent share of the firm’s AUM. Transamerica Financial Advisors also works with employer retirement plans, businesses, trusts, estates, charitable organizations and educational accounts like 529 plans and UGMA/UTMA plans.

Transamerica itself does not specialize in serving any one type of client group. However, the advisors themselves may decide to specialize in certain areas like retirement planning and support for small businesses.

Services offered by Transamerica Financial Advisors

The firm offers asset management, life insurance and financial advisory services to its clients. The advisors can manage client funds both on a discretionary basis, where they can make trades on their own, or on a non-discretionary basis, where clients need to approve all trades. Clients can also sign up for robo-advisor managed accounts from Betterment through the Transamerica® ALPHA Program.

Besides working with individuals, Transamerica supports workplace retirement plans and also functions as a broker-dealer able to process investment trades for its clients. Last, they have partnerships with over 100 different companies like Nationwide, Pacific Life and Prudential so the Transamerica representatives can sell their products.

For reference, here is a list of services clients can get through the firm:

• Investment advisory services
• Financial planning
  • Retirement planning
  • Trust and estate planning
  • Charitable planning
  • Education planning
  • Business planning
• IRA and 401(k) rollovers
• Life insurance
• Employee benefit plan fiduciary services
• Educational seminars and workshops
• Brokerage services

How Transamerica Financial Advisors invests your money

Transamerica doesn’t report an underlying investment philosophy or strategy. Instead, it provides its representatives with access to a large variety of investment portfolios and funds. Representatives can then choose the ones that best fit their client’s goals.

The firm also offers a social impact fund that focuses on promoting socially responsible investments and an alternative fund that looks to hedge against market volatility with assets like precious metals and natural resources.

Ultimately, the way your money will be invested can depend on which representative you sign up with. Your representative will help you decide which of the portfolios and strategies makes sense for your situation. Be sure to ask the representative whether they follow any specific investment philosophy when it comes to their recommendations.

Fees Transamerica Financial Advisors charges for its services

The firm charges clients based on a percentage of AUM for its portfolio management services. The rate will depend on which program you enroll in and the size of your portfolio. In general, rates can range from 0.65% to 2.60% a year. You are able to negotiate the fees with your advisor when you sign up.

On top of the advisory fee, you may owe extra for the investment expenses like administration charges, 12(b)-1 fees for mutual funds and transaction charges.

Transamerica and its representatives can also make commissions by selling insurance and investment products.

Transamerica Financial Advisors disciplinary disclosures

Over the past decade, Transamerica Financial Advisors has faced a number of incidents that required a disclosure in its Form ADV filing with the SEC. For reference, all registered investment advisors are required to report such events — including any criminal charges, regulatory infractions and civil lawsuits faced by the firms and its employees or affiliates — from within the past 10 years.

All of Transamerica Financial Advisors’ disclosures are government regulatory actions, with three from the SEC and three from the Financial Industry Regulatory Authority (FINRA) within the last decade. Below is a summary of the firm’s disciplinary disclosures, categorized by the regulatory agency.

SEC proceedings:

• March 11, 2019: The SEC alleged that the firm failed to disclose conflicts of interest from fees it collected on certain mutual funds. The firm paid $5,364,292.04 plus $658,780.64 in interest to settle with the SEC.
• August 27, 2018: The SEC alleged that the firm failed to disclose errors in investment models provided by other companies, and that it didn’t have the proper internal controls to catch this error before selling to clients. The firm paid a penalty and refunded money to clients who used this product.
• April 3, 2014: Per the SEC, Transamerica allegedly failed to factor in the proper advisory discounts for some of its clients and ended up overcharging fees. The firm paid a fine, refunded the clients and hired a consultant to review its procedures to prevent this from happening again.

FINRA proceedings:

• December 21, 2020: FINRA alleged that Transamerica failed to properly supervise its representatives for the sale of variable annuities, mutual funds and 529 plans. Transamerica Financial Advisors was censured for this and paid a $4.4 million fine, while also refunding the money to clients.
• July 27, 2015: FINRA alleged that the firm had failed to identify and apply volume discounts for some of its clients’ purchases. The firm agreed to pay a fine and refund the money to certain clients.
• January 20, 2015: The firm paid a $50,000 fine to settle FINRA allegations that it had provided inaccurate and misleading information on a Form U5 after terminating one of its registered representatives.

Transamerica Financial Advisors’ onboarding process

1. Connect with a firm representative: You can use the firm’s  Agent Finder tool where you enter your ZIP code to pull up a list of the closest agents and offices. The tool will also provide the name, address, phone number and email address for these representatives. You can contact them directly or request a call through the website to get the process started.Some of the firm’s agents have pages and websites where they list their specialties but others do not, which can make it a little difficult to learn much about them, besides location.
2. Meet with an agent: When you set up a meeting with an agent, they will get to know your financial situation, needs and objectives. There is no charge for the meeting so you can see what their recommendations would be without paying upfront.
3. Get the advisor’s recommendations: From there, your advisor will put together a recommendation of products and investment recommendations. If you are happy with the plan, you can sign on as a client.
4. Receive regular account updates and reviews: Once your account is established, you can expect to receive a review at least annually. Clients will generally receive monthly or quarterly account statements, transaction confirmations and/or performance reports, with the frequency varying depending on the program in which you’re enrolled.

Where Transamerica Financial Advisors is located

The firm has nearly 300 office locations across the U.S., per its Form ADV. In its filings, it lists office locations in the following states:

• Arizona
• California
• Colorado
• Georgia
• Nevada
• Ohio
• Oregon
• Tennessee
• Texas
• Utah

Additionally, the firm is registered to serve clients in all 50 states, plus the District of Columbia.

Is Transamerica Financial Advisors right for you?

If your portfolio is on the smaller side but you still want an investment advisor, Transamerica Financial Advisors could be worth considering. You can sign on for some of its plans with an initial investment of just $10. This can be useful for clients who can’t meet the high minimums of other advisors that may require $500,000 or more in assets to join. Additionally, Transamerica offers a large selection of products thanks to its many partners and dual registration as a broker-dealer.

On the other hand, these affiliations can pose potential conflicts of interest for the firm as the team may be financially incentivized to make certain recommendations. Additionally, Transamerica Financial Advisors’’ investment management fees are comparatively very high, even for large portfolios. Ultimately, the choice of a financial advisor comes down to your personal preferences and unique needs, and it is critical that you find an advisor who suits you and who you feel comfortable working with.