Our firm is investigating Cetera Wealth Services broker and investment adviser representative Philip Fu-Pei Chao (CRD# 4568140) of Patterson, California for potential misconduct involving allegedly unsuitable real estate investment trust (REIT) recommendations and misrepresentations about risk, income, and growth to investors.
Financial Advisor’s Career History
According to FINRA and IAPD records, Philip Fu-Pei Chao has worked in the securities industry since 2002 and is currently associated with both a broker-dealer and an investment advisory firm in the Cetera family.
Mr. Chao is presently registered as a General Securities Representative with Cetera Wealth Services, LLC (CRD# 13572), based out of a branch office in Patterson, California. He has been registered with Cetera Wealth Services since June 9, 2021. He is also registered as an Investment Adviser Representative with Cetera Investment Advisers LLC (CRD# 105644), with that advisory registration effective since June 29, 2023.
His prior registration history includes:
- Cetera Advisor Networks LLC (Investment Adviser Representative), El Segundo, California, from 2021 to 2023.
- Voya Financial Advisors, Inc., Patterson, California (both broker and investment adviser registrations), from 2006 to 2021.
- Merrill Lynch, Pierce, Fenner & Smith Inc., Castro Valley, California, from 2004 to 2006.
- Morgan Stanley / Morgan Stanley DW Inc., with registrations beginning in 2002.
Mr. Chao has passed the Securities Industry Essentials (SIE), Series 7 (General Securities Representative), Series 31 (Futures Managed Funds), and Series 66 (Uniform Combined State Law) examinations, and he holds the Certified Financial Planner (CFP) designation. FINRA records also reflect various outside business activities, including ownership of a financial services DBA and independent insurance work.
Philip Fu-Pei Chao Fraud Allegations and Investor Complaints Explained
Public FINRA disclosure records show one customer dispute involving Mr. Chao, reported as a customer arbitration that has been settled. The arbitration arose from his time at Voya Financial Advisors, Inc. and focuses on alternative real estate investments.
According to the disclosure, claimants alleged that Mr. Chao recommended multiple real estate investment trust (REIT) products that were unsuitable for their financial situation and objectives. The customers further alleged that he misrepresented the risks and the potential for future income and growth associated with those REIT investments. The product type is categorized as “Real Estate Security.”
The FINRA Office of Dispute Resolution arbitration was filed on January 25, 2024 (Case No. 24-00196). The associated complaint was received on January 26, 2024. Although the alleged damages field is reported as “$0.00,” the firm noted that it conducted a good-faith review and concluded that the damages being claimed exceeded $5,000.
The case did not remain pending. The disclosure shows that the matter was resolved as follows:
- Forum: FINRA Office of Dispute Resolution (arbitration).
- Docket/Case Number: 24-00196.
- Filing Date: January 25, 2024.
- Product Type: Real estate investment trust (REIT) / real estate security.
- Core Allegations:
- Unsuitable recommendations of multiple REIT products.
- Misrepresentation of the risks of the investments.
- Misrepresentation of the potential for future income and growth.
- Status: Settled as of August 1, 2025.
- Settlement Amount: $62,660.89.
- Individual Contribution: $0.00 (the firm paid the full settlement, according to the disclosure).
- Employing Firm at Time of Activities: Voya Financial Advisors, Inc.
Both the firm and Mr. Chao reported that the arbitration was settled to avoid the ongoing costs and uncertainty of defending the matter and that the firm’s internal investigation did not result in a finding of wrongdoing by the representative. As with all BrokerCheck disclosures, the settlement reflects a business decision and does not, by itself, constitute an admission of liability.
In summary, Mr. Chao’s public record currently reflects:
- Customer Disputes:
- 1 customer arbitration, settled (involving alleged unsuitable REIT recommendations and misrepresentations).
- Regulatory Actions:
- None disclosed.
- Criminal, Civil, or Financial Disclosure Events:
- None disclosed beyond the customer dispute described above.
Investors who purchased multiple REITs or other alternative real estate products through Mr. Chao—particularly during his tenure at Voya Financial Advisors—may wish to review their account statements and the original risk disclosures carefully to determine whether they experienced similar issues.
To obtain a copy of Philip Fu-Pei Chao’s FINRA BrokerCheck report, visit this link.
Robert Wayne Pearce Is Committed to Recovering Your Investment Losses
FINRA Rule 2111 (Suitability) requires a broker or firm to have a reasonable basis to believe that any recommended transaction or investment strategy is suitable for the customer based on that customer’s investment profile, including factors such as age, net worth, investment experience, risk tolerance, time horizon, and liquidity needs. In a case like the settled arbitration involving Mr. Chao—where claimants allege that he recommended multiple REIT products that were unsuitable and concentrated them in illiquid real estate securities—arbitrators would examine whether the REIT strategy matched the customers’ income needs, risk tolerance, and desire for liquidity. If the REITs were inherently risky, long-term, or illiquid, but the customers required stability, capital preservation, or ready access to funds, a panel could find that the recommendations violated Rule 2111’s customer-specific suitability obligation, even if the investments were technically permissible products.
Detail what FINRA Rule xxxx is in context to what {broker|advisor} did in the complaints above.
FINRA Rule 2010 (Standards of Commercial Honor and Just and Equitable Principles of Trade) is a broad ethical standard that requires firms and associated persons to conduct business with high standards of commercial honor and fair dealing. In the Chao matter, the customers alleged not only that the REIT recommendations were unsuitable, but also that the risks and the potential for future income and growth were misrepresented. If a broker downplays the risks of illiquid, higher-commission REITs or overstates the stability and income they can provide, arbitrators may view that conduct as inconsistent with just and equitable principles of trade. Even when a particular recommendation arguably meets technical suitability criteria, misleading sales pitches or omissions about risk, fees, or liquidity can be framed as violations of Rule 2010, because they undermine investor trust and the integrity of the market.
Detail what FINRA Rule xxxx is in context to what {broker|advisor} did in the complaints above.
FINRA Rule 3110 (Supervision) requires brokerage firms to establish and maintain a supervisory system reasonably designed to achieve compliance with securities laws and FINRA rules, including written procedures for reviewing recommendations in complex or alternative products such as REITs. In a REIT-focused arbitration like the one involving Mr. Chao, investors and their attorneys may look beyond the individual broker’s conduct to assess whether the employing firm adequately supervised alternative investment sales, reviewed REIT concentration levels in customer accounts, and scrutinized the income and risk projections used in sales presentations. If supervisory personnel failed to identify patterns of unsuitable REIT recommendations, excessive concentrations, or problematic sales scripts, investors may assert separate claims against the firm under Rule 3110 for failing to implement and enforce a reasonable supervisory system.
For over 45 years, Robert Wayne Pearce has helped investors recover losses caused by broker fraud, negligence, and unsuitable recommendations. His firm, The Law Offices of Robert Wayne Pearce, P.A., represents clients nationwide on a no-recovery, no-fee basis. Call (800) 732-2889 or email pearce@rwpearce.com for a free case review with an experienced securities attorney.