Buyer Beware

Alan Whitman – Morgan Stanley – Irresponsible and Greedy

Before you start giving your business to Alan Whitman Morgan Stanley, you should know about the various clients that have filed claims against this advisor. You should also know about the various shady provisions present in his disclosures. 

This information would help you determine if he’s truly worth your money or not. 

Who is Alan Whitman Morgan Stanley?

Alan Whitman Morgan Stanley is a financial advisor based in Pasadena, California. His office is located at 55 S Lake Ave Ste 700, Pasadena, CA 91101, US and its contact number is 626-405-9313. 

Although Alan and his firm claim to bring financial clarity and peace of mind to their customers, their disclosures suggest otherwise. 

There are many provisions in their disclosures which suggest this advisor ignores his clients’ interests. It’s more profitable for the firm to ignore your financial requirements and this is probably why Alan has had multiple disputes with his clients. 

Below are all the disputes and the shady provisions Alan Whitman has:

Issues Alan Whitman Morgan Stanley Tries to Hide from Investors

Multiple Disputes with Clients

Alan Whitman has worked in 5 firms in his career and has had a total of 3 disputes with his clients. The first dispute was in 2005 where the client alleged unspecified excessive fees charged in her fee-based managed account. 

In this dispute, the client had requested more than $5,000 in damages. However, Morgan Stanley denied this dispute by saying that the client had “agreed” to the fees when they signed the investment management agreement. 

That’s why you should review all the agreements thoroughly before you sign any of them. 

Alan’s second dispute with one of his clients was also in 2005. Just like the last one, the client alleged unspecified excessive fees charged in his fee-based managed account and the requested damages were more than $5,000. Here, Morgan Stanely gave the same excuse they gave last time to deny the dispute. 

Alan’s latest dispute was in June 2021 and it’s still pending. Here, the claimant alleges, inter alia, unsuitability with respect to Portfolio Loan Account recommendation – January 2015 to March 2020. 

The main reason why Alan has had so many disputes with his clients might be the manipulative provisions he has in his disclosures.

Broker-Dealer

One of the most prominent issues in Alan Whitman’s disclosures is he is a broker-dealer. Studies show that financial advisors that are broker-dealers fall short of the fiduciary standard. 

Being a broker-dealer has a negative impact on the quality of service an advisor offers. 

As a broker-dealer, Alan relies heavily on commissions for his income. Thus, it leads to many types of conflicts of interest such as sale of proprietary investments and revenue sharing from mutual funds.

I’ve explained how earning from commissions can have a negative impact on your financial future. 

Offering Investments with 12b-1 Fees

Alan Whitman Morgan Stanely offers investments that charge 12b-1 fees, a marketing fee which only increases the cost of the product. 

The 12b-1 fee is highly notorious in the finance industry because it increases the cost of your investment substantially without offering anything new for the added cost. SEC had done an extensive study to compare the returns of investments that charge 12b-1 fees and those that don’t. 

They found no difference between the returns of the two. In fact, the investments that charge this fee were offering poorer returns because their cost was higher. 

That’s why you should avoid financial advisors that charge this fee. 

Putting Clients at Excessive Risk

Alan and his firm charge performance-based fees, where they earn money only when they beat a specific benchmark. On paper, performance-based fees seem quite attractive but it incentivizes the advisor to pursue high-risk strategies. 

If you’re looking for securing long-term wealth, high-risk strategies are something you should definitely avoid. Moreover, high-risk strategies can wipe out significant chunks of your invested capital instantaneously. 

Furthermore, you can’t hold your advisor liable for the losses you incur because of the advisor. Performance-based fees create a very compromising situation for you, the client.

Being a “Salesman” Instead of an Advisor

A prominent issue with Alan Whitman and his firm is that he “sells” proprietary products of Morgan Stanley. Selling proprietary products leads to many conflicts of interest because the advisor has incentive for ignoring your financial requirements. 

Proprietary and affiliated products generate heavy commissions for an advisory firm. Trusting your financial advisor’s recommendations when they sell such investments is very challenging. You must answer this question before trusting such an advisor, “Would they prioritize your financial requirements or their wallet?’ 

Chances are, they will pick the latter. That’s why you should be cautious of financial advisors who “sell” securities instead of recommending them. 

If you’re a client of Alan Whitman Morgan Stanley, you should review your investments and see which ones generate high commissions for him. In many cases, the advisor suggests subpar investments to their client. Hence, beware of such advisors. Alan isn’t the only Morgan Stanley advisor who has such greedy provisions for his clients. Lyon Polk is also notorious for having such terrible policies. 

Should You Trust Alan Whitman Morgan Stanley? 

Alan Whitman has had numerous disputes with his clients. Furthermore, his firm has various terms and conditions that put their clients at a huge disadvantage. From charging excessive fees to putting you at unnecessary risk, they do nearly everything that’s dangerous for your financial security. 

You should avoid this financial advisor and look for someone else, preferably someone with better policies. 

2.8Expert Score
Can't Trust Alan

Alan Whitman of Morgan Stanley has a lot of industry experience. But it seems he is using his industry knowledge in the wrong way. His disclosures show that it’s more profitable for him and his team to ignore your financial requirements while making recommendations.

Trust
2.5
Service
2.5
Experience
3.5
Concern for Clients
2.5
Pros
  • None
Cons
  • Multiple legal disputes with clients
  • Broker-dealer conflict
  • Selling affiliated investments
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