Bonzell

I. FACTS AND PROCEDURAL BACKGROUND1

A. Facts RCS is a financial, retirement planning, and investment advisor that manages the Bonzells’ retirement savings. The Bonzells have been clients of RCS and its predecessor for approximately 30 years, since the early 1990s. The Bonzells have worked with RCS’s chief executive officer, Thomas Vaughan, for about 20 years, since approximately 2005. In 1996, the Bonzells opened a brokerage account with LPL Financial LLC, RCS’s managed platform. The arbitration provision in LPL Financial LLC’s brokerage account application and agreement stated that arbitration would be governed by “the rules, then in effect of the Financial Industry Regulatory Authority” (FINRA). The provision did not allow RCS to seek non-arbitral remedies in the event of the client’s nonpayment of RCS’s fees. In 2010, RCS became registered with the United States Securities and Exchange Commission, which required all RCS’s existing clients “to switch from LPL Financial LLC’s managed retail platform to the LPL Financial RIA managed platform.” To effectuate this conversion, on or about January 21, 2010, RCS sent all of their clients LPL Financial LLC change forms and an…