Bordeaux Wealth Advisors – $700,000 Lost by the Client’s Funds
While looking for an independent financial advisory firm in California, you’d come across multiple firms. One of them is Bordeaux Wealth Advisors. It’s a relatively new firm in comparison to the titans operating in the industry but has multiple greedy provisions present in its terms and conditions.
These provisions make it extremely difficult to trust the advisors running this firm. From putting you at excessive risk unnecessarily to charging you extra fees, there are a ton of issues present in this firm.
As an investor, you should be familiar with all the issues present in an advisor so you can make a better-informed decision:
A Brief Information About Bordeaux Wealth Advisors
Bordeaux Wealth Advisors is a financial advisory firm based in Menlo Park, California. Their address is 1550 El Camino Real Suite 100, Menlo Park, CA 94025, US, and their contact number is 650-289-1105.
The firm’s office opens from 8 AM to 5: 30 AM on weekdays. They have a total of 18 advisors who offer various financial planning services including comprehensive financial planning, values-based investing, investment advisory services, and plenty of others.
The partners at this firm are Thomas Myers, David Murdock Jr., Jon Ekoniak, Brain Vowinkel, and Jon Snare. Thomas is the CEO of this firm.
Bordeaux Wealth Advisors claim to act as personal CFOs. However, the firm’s provisions and disclosures suggest they don’t keep your interests in mind when they are acting as your CFOs.
CFO (Chief Financial Officer) is a top-level executive responsible for supervision and coordination of accounting team, attorneys and every single entity of the firm related to finances.
The proof of their unprofessional behavior is scattered around the web. I found a review of this wealth advisory firm on Google, posted by someone who applied for a job here. It can give you an idea of how professional these guys truly are:
Christopher shares that he had applied for a job here and suggests avoiding this place if you’re looking for one. The firm scheduled and confirmed an interview but never bothered to call for the interview. They didn’t even reach out to explain why.
Christopher shares that this company has no respect for a person’s time.
Incompetent Leadership: Losing $700,000 of their Client Money
Before you start working with any financial advisory firm, you should look them up on FINRA BrokerCheck or Adviserinfo.sec.gov. They are helpful databases that tell you everything you need to know about your financial advisor such as the exams they’ve passed, the number of years they have passed in the industry, and the legal disputes they’ve had with their clients.
The CEO of Bordeaux Wealth Advisors, Thomas Myers, had a multi-million conflict with one of his clients in 2003. In this dispute, the claimant claimed losses of $700,000 incurred on a $5 million portfolio. They claimed that the proposed asset allocation he adopted was unsuitable for his risk profile.
This included the equity and bond investments made in 2001. The claimant requested $700,000 in damages. Later, the client withdrew the legal dispute.
But this is a huge red flag. It means you can’t trust the leadership at Bordeaux Wealth Advisors easily. They don’t have a good record. Losing $700,000 would leave a huge dent on your portfolio.
Moreover, the current provisions in their terms and conditions suggest they have multiple systems in place to leech money off of you. Below are the predatory provisions present in their disclosures:
Putting Clients at Excessive Risk
The first and probably the biggest issue in this firm is that it charges performance-based fees. Charging performance-based fees is heavily looked down upon in the finance industry because it puts the client in a compromising position.
When your advisor charges you performance-based fees, they only make money when they outperform a specific benchmark. In order to do this, the advisor takes excessive risks, which are unnecessary in most cases.
Employing high-risk strategies leads to poor or mediocre returns for the client, even though the investments “outperform” a benchmark. Moreover, high-risk strategies usually lead to losses, hence they have the name “high-risk”.
This is why charging performance-based fees was illegal before 1985. Finally, if you incur losses because of your advisor’s implementation of high-risk strategies, you can’t hold him liable for it.
The agreements you sign when you become a client of Bordeaux Wealth Advisors ensure that you can’t hold them legally viable.
Recommending Affiliated Investments
Bordeaux Wealth Advisors has several affiliates who underwrite the investments they recommend to their clients. These investments offer the firm higher commissions than other investments. Hence, they might suggest to you these investments regardless of their suitability.
In many cases, your advisor might suggest an investment even though there are better options available simply because the former offers higher commissions.
Clearly, you can’t trust the recommendations your advisor makes when they earn commissions from the sale of certain investments. If you’re a client of Bordeaux Wealth Advisors, you should review the securities they have recommended to you.
12b-1 Fees Conflict
This wealth advisory firm offers products that charge 12b-1 fees. The 12b-1 fee is a marketing fee which only increases the cost of the investment without adding any value to the same.
You might think that just because you’re paying extra for certain securities, you’d get better returns. But you’d be mistaken.
In fact, the SEC had conducted a study on this matter and found that investments that charge 12b-1 fees offer no better returns than those that don’t charge this fee. Furthermore, the ROI on the investments that charge this fee was worse because theri cost was substantially higher.
Conclusion
Bordeaux Wealth Advisors has a plethora of red flags. The firm charges performance-based fees and 12b-1 fees, both of them are very dangerous. Furthermore, the company has received complaints for mistreating others and its CEO caused his client losses worth $700,000.
All of this suggests that Bordeaux Wealth Advisors is not a reliable firm. You should look for a different advisory firm.
