In 2021, one of Lansing’s clients named him in a life insurance policy with his approval. Lansing failed to seek the required written permission from Cetera to be named as a beneficiary. The client passed away in July of 2024. In September, Lansing received a payment of $50,000 from the life insurance company. Lansing was not related to this customer and did not seek Cetera’s prior approval to receive the funds. In May of 2025, Cetera discovered the payout. Lansing later repaid the sum to the client’s estate at Cetera’s request.
Lansing stated that he had attempted to remove himself from the policy in March of 2022, but the requested change was never made. A miscommunication with the insurance company was the reason.
After FINRA investigated the matter, Lansing agreed to a seven-month suspension and a $10,000 fine, effective February 3, 2026.
Why Brokers Aren’t Allowed To Be Beneficiaries
Generally, brokers can only be an executor, trustee, or hold power of attorney for a customer if they are immediate family members. If not, the broker must have written permission from the firm.
FINRA’s Rule 3241 specifically prohibits brokers from being one of these and receiving payouts except from their immediate relatives. Meanwhile, FINRA’s Rule 2010 requires brokers to observe “high standards of commercial honor and just and equitable principles of trade.”
In more practical terms, the rules are to protect vulnerable investors from brokers who may not be entirely ethical. The general idea is that a broker or other financial professional should not be intentionally positioned to profit from a client’s demise.
Over time, brokers and RIAs can become close friends with long-term customers. This can lead to birthday and holiday gifts and other personal-level exchanges, which aren’t necessarily prohibited. Even with their firm’s permission and other safeguards in place, wills, life insurance, or other financial payments later could lead to questions of broker impropriety, including undue influence and conflicts of interest.
A person considering adding their broker or investment advisor to their estate plan should, at the very least, mention their intentions if they are still handling the person’s accounts. (This does not apply to a broker not assigned to a specific customer’s accounts.) Advance notice will give them time to either decline being named or work with their firm to get permission ahead of time. Surprising your broker or investment advisor with a sum of money after your passing can cause major headaches for both the named individual and other beneficiaries, such as a spouse, children, or other legal heirs. At the very least, their broker-dealer will require them to return the money to your estate. Other beneficiaries could contest a will or other instrument, leading to expensive estate litigation.
Did You Invest With Thomas Lansing?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses from stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.