Our firm is investigating Principal Securities, Inc. broker and investment adviser representative William Matthew Schumaker (CRD# 6485048) of Wauwatosa, Wisconsin for potential investment-related misconduct.
Financial Advisor’s Career History
According to FINRA BrokerCheck, William Matthew Schumaker has worked in the securities and insurance industry since 2015.
He is currently registered with Principal Securities, Inc. (CRD# 1137) and affiliated with office locations in Wauwatosa, Wisconsin and Monona, Wisconsin. He has been registered with Principal Securities, Inc. as a broker since September 29, 2017, and as an investment adviser representative since September 29, 2017.
BrokerCheck also reports that he is licensed in at least 16 U.S. states and territories, including Alaska, Arizona, California, Colorado, Delaware, Florida, Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Oregon, Pennsylvania, Texas, and Wisconsin. He has passed the Series 7, Series 6, Series 63, Series 65, and the Securities Industry Essentials (SIE) exams.
Schumaker’s disclosed employment history over the last decade includes:
- Great Lakes Retirement Plan Consultants – Financial Professional (July 2024–Present), Wauwatosa, WI
- Principal Life Insurance Co. – Financial Representative/Agent (September 2017–Present), Wauwatosa, WI
- Principal Securities, Inc. – Registered Representative (September 2017–Present), Wauwatosa, WI
- Northwestern Mutual Wealth Management Company – Representative (August 2016–September 2017), Milwaukee, WI
- Northwestern Mutual Investment Services, LLC – Registered Representative (August 2015–September 2017), Milwaukee, WI
- Northwestern Mutual Life Insurance Company – Agent (June 2015–September 2017), Milwaukee, WI
He has also disclosed outside business activities related to insurance and employee benefits brokerage, including a cafeteria-plan insurance brokerage business through GIS Benefits Brokerage.
William Matthew Schumaker Fraud Allegations and Investor Complaints Explained
FINRA BrokerCheck reports one customer dispute that was settled involving William Matthew Schumaker while he was associated with Principal Securities, Inc.
According to the disclosure, the client alleged that Schumaker recommended a variable universal life (VUL) insurance policy that was unsuitable and requested that the surrender charges on the policy be waived. The product was categorized as “Insurance” on the disclosure. The complaint was received on April 13, 2022, and the alleged damages were $7,447.50.
FINRA records show that the dispute was:
- Type of disclosure: Customer Dispute – Settled
- Reporting source: Broker
- Employing firm at time of activity: Principal Securities, Inc.
- Allegation: Unsuitable recommendation of a VUL policy and request to waive surrender charges
- Alleged damages: $7,447.50
- Settlement amount: $7,447.50
- Individual (broker) contribution to settlement: $500.00
- Complaint pending: No
- Status: Settled as of May 26, 2022
The broker statement for this matter notes that, “Without admitting fault, the firm and the representative settled the claim.”
While a settlement does not constitute an admission of wrongdoing, allegations that a broker recommended an unsuitable variable universal life (VUL) policy raise serious concerns about whether the broker properly assessed the client’s investment objectives, risk tolerance, liquidity needs, and time horizon, and whether the costs and surrender charges were appropriately disclosed and explained.
Investors who purchased variable universal life policies or other complex insurance-linked investment products through William Matthew Schumaker and later incurred unexpected fees, surrender charges, or losses may have potential claims to recover some or all of their losses through FINRA arbitration or other legal remedies.
For context and clarity, the disclosure can be summarized as follows:
- Action: Customer filed a written complaint alleging that Schumaker recommended an unsuitable VUL policy and requested waiver of surrender charges.
- Product involved: Variable Universal Life (insurance product).
- Date complaint received: April 13, 2022.
- Alleged damages: $7,447.50.
- Disposition: Settled.
- Settlement amount: $7,447.50, with Schumaker personally contributing $500.
- Firm involved: Principal Securities, Inc.
- Broker statement: Settlement reached without admission of fault.
Investors should understand that FINRA-reported disclosures may involve allegations that are contested, unresolved, or unproven, and that settled disputes may be resolved for business reasons with no formal finding of misconduct. However, even a single customer dispute alleging unsuitable recommendations is a red flag that warrants closer review of the broker’s sales practices, especially when it involves complex products such as VUL policies with surrender charges and long-term fee structures.
To obtain a copy of William Matthew Schumaker’s FINRA BrokerCheck report, visit this link.
Robert Wayne Pearce Is Committed to Recovering Your Investment Losses
FINRA Rule 2111 – Suitability (Ruling Part 1)
In cases like the customer dispute reported against William Matthew Schumaker, the core regulatory issue often centers on FINRA Rule 2111 (Suitability), which requires that a broker have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on that customer’s profile (age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, and risk tolerance).
When a customer alleges that Schumaker recommended an unsuitable VUL policy and then incurred surrender charges when exiting the policy, the question under Rule 2111 becomes whether:
- The VUL’s long-term nature, internal costs, and surrender fees were reasonable in light of the client’s time horizon and liquidity needs.
- The product’s risks and fees were appropriately explained and documented.
- The policy’s structure and surrender schedule were consistent with the client’s stated objectives (for example, whether the client was looking for flexible, short-term savings versus long-term, insurance-linked investing).
If a broker pushes a complex product like a VUL without thoroughly evaluating and documenting suitability, regulators and arbitrators may find that the broker failed to satisfy Rule 2111, even if the matter is resolved privately through a settlement without an official finding of a violation.
FINRA Rule 2010 – Standards of Commercial Honor and Principles of Trade (Ruling Part 2)
FINRA Rule 2010 requires that members and their associated persons “observe high standards of commercial honor and just and equitable principles of trade.” This rule is broad and often used in conjunction with more specific rules such as Rule 2111.
In the context of the complaint against Schumaker, allegations that he recommended an unsuitable VUL policy and exposed the client to surrender charges can raise concerns under Rule 2010 if:
- The recommendation is viewed as self-interested or overly commission-driven, rather than focused on the client’s best interests.
- The client was not given clear, fair, and balanced disclosure about fees, expenses, and the difficulty of exiting the policy without substantial cost.
- The broker’s conduct is inconsistent with the “just and equitable” standard FINRA expects of all registered persons.
Even where FINRA has not formally charged a Rule 2010 violation, arbitration panels routinely consider this rule in evaluating whether a broker’s conduct was consistent with industry standards of honesty and fair dealing. The settlement reported in the disclosure does not establish a Rule 2010 violation, but the allegations themselves are the type that regulators and arbitrators examine through the lens of this rule.
FINRA Rule 3110 – Supervision and the Firm’s Responsibility (Ruling Part 3)
Although FINRA Rule 3110 (Supervision) is primarily directed at the brokerage firm rather than the individual broker, investor claims involving unsuitable VUL sales often allege that the firm failed to reasonably supervise the broker’s recommendations.
In situations like the one involving Schumaker’s settled complaint, Rule 3110 becomes relevant because:
- Principal Securities, Inc. was required to establish and maintain a supervisory system designed to ensure that recommendations of complex insurance products, including VULs, were suitable and properly documented.
- The firm should have had procedures to review and approve VUL applications and replacements, with special attention to surrender charges, premium funding, and the customer’s long-term ability to maintain the policy.
- If multiple similar complaints emerged, they could indicate a pattern of inadequate supervision of the broker’s VUL and other complex product sales.
While the BrokerCheck record only discloses a single settled dispute and does not reflect a formal Rule 3110 finding, investors pursuing claims in FINRA arbitration frequently assert that both the individual broker and the firm are responsible, with Rule 3110 forming part of the legal basis for holding the firm liable for failing to detect and prevent unsuitable recommendations that cause investment losses.
Losing money or paying heavy surrender charges on a variable universal life policy or other complex investment product can be overwhelming, but investors have legal options. Our firm carefully reviews each case to determine whether FINRA rules regarding suitability, disclosure, and supervision may support a claim for recovery, even where the broker and firm portray the dispute as a simple business settlement without admission of fault.
The Law Offices of Robert Wayne Pearce, P.A. is a nationally recognized securities law firm representing investors in FINRA arbitration and securities fraud cases on a contingency fee basis. Robert Wayne Pearce, the founding attorney, has more than 45 years of experience recovering millions for victims of broker misconduct and investment fraud. He previously defended major brokerage firms and now uses that insight to protect investors nationwide. To discuss your case directly with Mr. Pearce, call (800) 732-2889 or email pearce@rwpearce.com for a free consultation.