They Don't Mean It

What investment brokerage firms say and what they mean are apparently polar opposites. They want you to believe that they are acting in you best interests with catchy slogans, but when complaints are filed their tune changes.

You’ve heard ads like this one from Morgan Stanley:

“Having an intimate knowledge of blue chips and small caps is important. But even more important is an intimate knowledge of you and your goals. Get connected to a Morgan Stanley Financial Advisor and get a more personalized plan for achieving success.”

Stating that they want “an intimate knowledge of you and your goals” sounds like they are committed to acting in your best interests, in other words as a fiduciary. But according report from the Public Investors Arbitration Bar Association here is what Morgan Stanley said in an arbitration hearing:

“Claimant’s claim seeks to impose ‘fiduciary’ obligations and duties on Respondents that only arise in very limited circumstances that do not exist here, i.e. where Respondents are given discretionary trading authority over Claimant’s accounts.”

This Merrill Lynch ad seems to clearly state that they put your needs ahead of theirs. Sounds like the definition of a fiduciary. 

“It’s time for a financial strategy that puts your needs and priorities front and center.”

In arbitration, Merrill states “Respondents did not stand in a fiduciary relationship with Claimants.”

This UBS ad implies that each client’s needs “come first,” because it actually says “she comes first:”

“Until my client knows she comes first. Until I understand what drives her. And what slows her down. Until I know what makes her leap out of bed in the morning. And what keeps her awake at night. Until she understands that I’m always thinking about her investment. (Even if she isn’t.) Not at the office. But at the opera. At a barbecue. In a traffic jam. Until her ambitions feel like my ambitions. Until then. We will not rest. UBS.” 

When forced to address a client complaint, apparently they client’s needs are no longer preeminent:

“[A] broker does not owe a fiduciary duty to his customer in a non-discretionary account.”

And finally, we all know that we are “in good hand’s with Allstate.”

When push comes to shove, they pull back those helping hands and retreat to the same defensive position as the others:

“Állstate Financial Services owed no fiduciary duty to Claimants, and, therefore, no such duty was breached.”

The ads are certainly enticing but don’t trust that your financial advisor is looking out for your best interests. Get it in writing.