Brandywine Oak Private Wealth is a financial planning firm in Pennsylvania. Michael Henley, Steve Maconi, and Allisoon Brooks are some of the founders of this firm.
They offer income tax planning, retirement planning, insurance planning, and plenty of other services. However, these services might not be worth your time or money.
While writing this review, I found many issues in Brandywine Oak Private Wealth’s services. Many people ignore these issues while choosing an advisor because they are distracted by their accolades.
That’s why this review was so essential. Financial advisors don’t want their clients to uncover such information.
The following points will illustrate why Brandywine Oak Private Wealth might be unsuitable for you:
Brandywine Oak Private Wealth: About the Firm
Brandywine Oak Private Wealth is a financial planning firm based in Pennsylvania. Their address is 500 Old Forge Ln #501, Kennett Square, PA 19348, US. Brandywine Oak is located in the Beiler-Campbell Business Center.
The firm is relatively new. They entered the industry three years ago in 2018. However, its team members and founders have decades of investment advisory experience.
But having experience and accolades isn’t sufficient in the finance sector. As we’ll discuss further, you’ll find out the various ethical issues present in this firm and why it would be better to avoid working with them.
The main people behind Brandywine Oak Private Wealth are:
Michael Henley is the founder of Brandywine Oak Private Wealth. He is also the CEO of the firm and is a private wealth advisor. Prior to founding this firm, he worked at Merrill Lynch Wealth Management. Michael Henley Brandywine Oak has several certifications including CFP, CPWA, CRPC, and RMA.
Alison Brooks is the co-founder and COO of Brandywine Oak Private Wealth. In Forbes 2021, Alison was recognized among the Best-In-State Wealth Advisors. She holds CFP and CRPC certifications.
Steve Maconi is a founding partner and the chairman of Brandywine Oak Private Wealth. He holds the CRPC (Chartered Retirement Planning Counselor) qualification. Steve is also a speaker on retirement planning. Before Brandywine Oak, he used to work with Michael at Merrill Lynch Wealth management.
Tracy Mcguire is also a founding partner at Brandywine Oak Private Wealth. She is a private wealth manager and has been working in the industry for two decades. Tracy has CFP, MBA, and CRPC certifications.
With so many accolades and so much experience, anyone would think Brandywine Oak is the perfect place for them. However, this firm has many drawbacks.
Many clients overlook the red flags present in a financial advisory firm because they get distracted by their experience and accolades. That’s why I had to write this review on Brandywine Oak Private Wealth.
I want to help you make better-informed decisions when it comes to working with this firm.
Brandywine Oak Private Wealth and PKS Investments
Brandywine Oak Private Wealth is affiliated with Purshe Kaplan Sterling Investments, also known as PKS Investments. PKS Investments is headquartered in New York and is a boutique service provider that helps Wall Street Advisors launch their own advisory firms.
PKS Investments is certainly a reputed name in the industry, but I don’t think it’s a reliable one. Just last year, PKS Investments had to pay $1.5 million to the St. Jude Medical Group’s pension plan according to a SEC filing.
In 2019, PKS Investments had to pay $3.4 million in restitution because they overcharged a Native American tribe. Overcharging a protected group is no small matter. And it certainly doesn’t help PKS Investments’ reputation.
The firm had to pay a $750,000 fine to FINRA because they had failed to supervise the broker’s poor dealings. This is a serious issue. It suggests that the supervision at PKS Investments is quite poor.
The chances of a broker, affiliated with PKS Investments, to give you unsuitable advice seem higher because of it.
The advisor who had overcharged the Native American Tribe made $9 million in commissions. So you can understand how lucrative it is for a financial advisor to give biased investment advice to their clients.
In 2018, Purshe Kaplan Sterling Investments complaints were in the news because of a whistleblower. Apparently, PKS investments had dismissed an auditor a week after she started looking into some violations the firm had committed.
Keep in mind, Brandywine Oak Private Wealth is affiliated with this firm.
It’s a huge red flag in itself and is a prominent reason why I suggest avoiding this firm and the people associated with it such as Steve Maconi and Michael Henley.
Why Brandywine Oak Private Wealth is Unsuitable for You
So far, I have only mentioned the background of Brandywine Oak Private Wealth’s staff and its affiliation with PKS Investments.
While its affiliation with PKS Investments is a prominent red flag, it pales in comparison to the various ethical conflicts this firm has. The various conflicts of interest present in this firm’s disclosures suggest it would be best for their advisors to give subpar investment recommendations to their clients.
Following are their ethical conflicts:
Earns from Commissions
According to their disclosures, Brandywine Oak Private Wealth accepts commissions for its services.
They might receive these commissions from the sale of investment products. In other words, they act as sales professionals for the companies whose investments they sell.
This can influence the quality of their recommendations adversely. If an investment offers higher commissions but is unsuitable for you, the firm might still recommend it to you.
And that wouldn’t be okay.
Unsuitable advice can be detrimental to your financial well-being. A commission-based compensation structure makes it more lucrative for the advisor to ignore your interests.
Charges Extra for Same Returns
Brandywine Oak Private Wealth offers mutual funds with 12b-1 fees. 12b-1 fees is the marketing and distribution fees for a mutual fund. It usually goes into the advisor’s pocket.
The 12b-1 fees increase the cost of owning a mutual fund while offering no benefits for the extra price. SEC had even conducted a research to compare the returns of mutual funds that charge 12b-1 fees and the returns of those that don’t.
They found no difference between the returns of the two. In fact, mutual funds with 12b-1 fees would offer you poorer results because they are costlier.
Moreover, because this fee goes into the firm’s pockets, they might promote mutual funds with the 12b-1 fees to increase their profit. It offers no advantages to you.
Sells Insurance Products
Brandywine Oak Private Wealth is an insurance broker firm. This means they earn commissions from selling insurance products.
When your financial advisor sells insurance products, you should be wary of their insurance recommendations. In many cases, the advisor might insure you needlessly out of greed.
Another problem with such advisors is they might recommend costlier insurance products when lower-st alternatives are available. Brandywine Oak Private Wealth’s advisors have an incentive for recommending insurance products that don’t match their clients’ requirements.
Charges Performance-based Fees
Brandywine Oak Private Wealth charges performance-based fees. When your advisor earns performance-based fees, it means they are paid for outperforming an index (or a similar benchmark).
Even though it seems attractive, it’s one of the worst compensation structures in the advisory industry.
That’s because when an advisor earns performance-based fees, it incentivizes them to pursue high-risk strategies. Such strategies are dangerous for your capital as they can wipe out large chunks of your earnings quickly.
Research shows that mutual funds with performance-based fees take more risks than mutual funds without such fees and even offer poor performance.
This is particularly dangerous during down markets because it can lead to severe losses.
The highly risky nature of performance-based fees was the reason why Congress had banned it in 1940. It returned in 1985 when the SEC started allowing RIAs to charge such fee for qualified clients.
Performs Side-by-side management
Brandywine Oak Private Wealth performs side-by-side management. This means they manage large accounts (hedge funds, mutual funds) with smaller retail accounts.
Side-by-side management creates incentive for advisors to favor larger funds. This leads to unfavorable trade executions and unequal trading costs for their retail clients.
If you have a small retail account, you might not receive proper service and attention from such a firm. That’s why it’s a prominent red flag and you should watch out for advisors that perform side-by-side management.
Trades Recommended Securities
According to its filings, Brandywine Oak Private Wealth trades the securities it recommends to its clients. There are many reasons why it’s a red flag.
First, it can allow the advisor to use their clients’ funds for price manipulation, without their knowledge. Second, it gives them opportunities to perform various shady activities such as front running.
Front running is when your advisor buys or sells investments before you.
Ideally, an advisor should disclose all the positions they hold when they are recommending a related investment.
But that’s only in ideal cases. Many times, the advisor doesn’t disclose their investments and the positions they hold. This gives them many opportunities to take advantage of their clients.
Why these things matter:
It’s important to know about these conflicts because they help you realise if your advisor has your best interests in mind or not.
Every financial advisory firm is a business. But they should operate ethically and in the interest of their clients.
With such conflicts of interest, it’s highly unlikely that Brandywine Oak Private Wealth cares much for its clients. Many of them might not even know about these conflicts of interest.
For example, Brandywine Oak Private Wealth’s advisors earn from commissions. This means they have an incentive for suggesting you investments that offer them higher commissions even if the investment doesn’t match your goals or requirements.
In such cases, the client gets subpar results. They miss out on a lot of financial growth unknowingly. You wouldn’t suspect a heavily acclaimed advisor to provide such service after all, would you?
Brandywine Oak Private Wealth’s team misuse their years of experience to take advantage of naive clients. The various ethical conflicts in this company’s disclosures suggest they might be providing suboptimal advice to their clients.
They have financial incentives for ignoring your requirements and goals while recommending your investments.
If you’re a client of Brandywine Oak Private Wealth, I highly recommend reviewing your investments. And if you find any discrepancies, don’t hesitate in contacting your attorney.
Brandywine Oak Private Wealth has too many ethical conflicts. This firm has more incentive for giving subpar advice to its clients than for catering to their needs. Their affiliate, PKS Investments, has had to pay millions in recent lawsuits.
- Experienced team
- Charges performance-based fees
- Offers mutual funds with 12b-1 fees
- Their affiliate, PKS Investments has paid millions in different lawsuits recently