Is Cambridge Investment Research Safe?
Cambridge Investment Research, Inc. might not be widely known, but it's a broker-dealer used by many investment advisors. Here's our detailed research on them.
Cambridge Investment Research Background
Founded in 1981, Cambridge Investment Research is currently one of the largest broker-dealers in the United States. It mainly serves over 3,800 independent financial advisors across the country. The company is based in Fairfield, Iowa.
Cambridge also runs its own investment advisory business, which is a smaller part of its operations.
Cambridge manages around $144 billion in client assets, generating over $1 billion in revenue each year.
Is Cambridge Investment Research Legitimate?
Cambridge is officially registered with both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as an investment advisory firm and a broker-dealer. These organizations regulate and monitor financial firms in the U.S. Cambridge must follow their rules.
Cambridge's FINRA ID numbers are 134139 for its advisory services and 39543 for broker-dealer services. Its SEC registration numbers are 801-63930 for advisory services and 8-48740 for broker-dealer services.
Cambridge's record includes 14 disclosures since 1995. For example, it was fined $250,000 by the SEC for not protecting customer information properly. More recently, it was criticized for not being clear about certain fees and fund selections that benefited another part of its business, though no fine has been issued for this yet.
Is Cambridge Investment Research Insured?
Cambridge is a member of the Securities Investor Protection Corporation (SIPC), which protects clients' cash and securities up to $500,000, with a $250,000 limit for cash.
Cambridge also has an FDIC-sweep program that offers additional insurance on uninvested cash balances across several banks, extending protection up to $1.5 million per account. If the FDIC option isn't used, cash balances are protected by SIPC up to $500,000.
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Custody and Clearing Services
Cambridge uses its own services as well as those from National Financial Services, LLC and Pershing, LLC for holding client assets. Both of these firms are registered with FINRA and the SEC and are also members of SIPC, which means assets they hold are protected up to SIPC limits. They also handle much of the paperwork for Cambridge, such as confirming trades and sending out statements.
Cambridge Investment Research BBB
Since Cambridge mainly supports independent investment advisors, it doesn't interact much directly with the public. Therefore, it doesn't have a profile with the Better Business Bureau (BBB). However, National Financial Services, one of its custodians, has an A+ rating with the BBB and has resolved two complaints in the last three years.
Is Cambridge Investment Research Safe Verdict
Cambridge Investment Research is a legitimate business with ties to other reputable firms. However, it has some past issues with securities violations, which is not uncommon in the industry. Clients should be aware of both Cambridge’s history and the records of any advisors they work with.
Cambridge Investment Research Review
Now that we know Cambridge Investment Research is legitimate, let’s look at what it offers and the associated costs.
Broker-Dealer Operation
Cambridge acts as a broker-dealer, which means it holds and manages investments for its clients' financial advisors. The services, products, and fees can vary significantly depending on the individual financial advisor. We know that the fees and available investments cover a wide range:
Possible investment options include:
- Stocks
- Options
- Bonds and other fixed-income investments
- Mutual funds (over 23,000 available)
- ETFs and ETNs
- UITs
- Interval funds
- Variable and fixed annuities
- Variable universal life insurance
And alternative investments, including:
- Direct participation programs (DPPs)
- Real estate investment trusts (REITs)
- Managed futures
- Limited partnerships (LPs)
- 1031 exchanges
- Special purpose acquisition companies
- Precious metals
- Hedge funds
- Business development corporations (BDCs)
- Private equity
Account types vary by financial professional but can include individual, joint, IRA, 403(b)(7), individual 401(k), and more.
Cambridge Investment Research Fees and Commissions
Commissions for trading stocks are around 3.5% of the trade value, but this could vary. Options and bonds have similar fees. Alternative investments range from 1% to 5%, depending on the asset.
Mutual funds and interval funds can cost between 1% and 5.25%, which might reflect a class A mutual fund fee. Unit Investment Trusts range from 1.5% to 3.5% in fees. Variable annuities have fees ranging from 1% to 5.5%, plus additional costs from 0.25% to 2%.
Accounts that use Pershing as a clearing firm have a $35 inactivity fee (reduced by 50% for mutual fund-only accounts), and retirement accounts have a $43.50 maintenance fee (reduced to $12.50 for mutual fund-only accounts).
Closing an account costs $143.50 ($100 for retirement accounts).
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
Visit Wiser Advisor
Cash Management
Through Pershing, Cambridge offers banking features like debit cards and check writing, though these come with various fees. The first check order through Pershing is free, and ATM withdrawals at PNC Bank or on the Allpoint network are free as well.
Advisory Operation
Cambridge Investment Research Advisors has a clearer fee structure for its advisory services. There are eight different programs, such as WealthPort Wrap and Retirement Plan Strategies Management Platform, with fees varying by program and account management style. Initial fees can be up to 3% of the account value, with ongoing management fees varying. Financial planning services can cost up to $500 an hour.
Margin
Cambridge offers margin investing in some accounts, with specific fees and policies disclosed when opening an account.
Cambridge Investment Research Review Judgment
Cambridge Investment Research provides a wide range of products and services, often at high costs. While it offers significant support and guidance through managed accounts, cheaper online options are available, though they may not offer as much personalized service.
Updated on 1/16/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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