Christopher Aitken is a UBS financial advisor and the managing director of Aitken and Associates. He is based in Ponte Vedra, Florida.
Even though he has many accolades under his name, he might not be as great as he seems to be.
I found a ton of ethical conflicts in Chris’s offered services. Moreover, I realized that many of his clients might not even know about these issues.
On top of that, Chris is facing a lawsuit for misrepresenting and giving unsuitable investment advice to an elderly couple.
Find out more in the following Christopher Aitken UBS review:
Christopher Aitken UBS – Who is He?
Christopher Aitken is a UBS financial advisor based in Ponte Vedra, Florida. He is the managing director of Aitken and Associates, his financial advisory firm.
Aitken has received many accolades and awards in his career that can make anyone believe he is the perfect fit for their financial requirements. He has been named to Barron’s top 100 and top 1200 financial advisors several times.
However, when you look at the various disputes and lawsuits he has had, you’d wonder how he even received these accolades. Moreover, the various ethical issues surrounding his advisory firm, Aitken and Associates, make matters worse.
Chris Aitken became a UBS financial advisor in 2017. Before that, he used to work at Merrill Lynch in the Private Bank & Investments Group.
And before that, he used to work at Citi/Smith Barney Institutional Consulting from 1986 to 2008.
Other members of his current team are David Hoang Ly and Ken Tonning Jr.
However, such accolades can fool anyone into thinking he’s the best advisor for them. The numerous ethical conflicts and the looming threat of a class action lawsuit tell a different story than this recognition.
Christopher Aitken and His Various Disputes
Christopher Aitken’s various accolades can fool you into thinking he’s an impeccable financial advisor. However, the man has multiple issues that most of his clients are probably unaware of.
Before you start working with any financial advisor, it’d be best to check their FINRA BrokerCheck profile.
There, you’d find information about their industry experience and past customer disputes. It’s crucial data and can help you determine if the advisor is as reliable as they sound.
However, apart from having past disputes, Christopher Aitken UBS faced a $11 million lawsuit when he was at Stanford.
At the time of writing this review, he’s facing a lawsuit as a part of the class action lawsuit against UBS Financial Services.
Now, do you think a guy with so many issues is an impeccable financial advisor? I’ll let the disclosures and the lawsuit help you here:
Chris Aitken has one disclosure in his FINRA BrokerCheck profile. The dispute is dated 6/19/2019, so it’s quite recent.
According to the disclosure, Chris’s client has alleged that from 2017 to the time of filing the case, Chris gave unsuitable advice and misrepresented them regarding an options overlay strategy investment.
Chris has responded by saying he’s updating the alleged damage amount as requested in Disclosure letters.
I don’t know how big this dispute is. Because the requested damages aren’t mentioned in the disclosure.
However, unsuitability and misrepresentation is a prominent issue. This is the same issue that has caused investors all across the country file cases against UBS Financial Services recently.
The $11 Million Lawsuit ($7 Billion Ponzi Scheme)
In 2009, the receiver overseeing R. Allen Stanford’s businesses had announced that he was suing two former employees of the firm for over $11 million.
They had filed this lawsuit because they wanted the investors to get their money back as they were defrauded to invest in a $7 billion Ponzi scheme. If you didn’t know, Stanford was involved in a major Ponzi scheme and its owner, Allen Stanford was found guilty in 2012.
Stanford had offered a scheme promising inflated returns on CDs but used the money from their new investors to pay off their old investors. Moreover, Stanford had used these funds to maintain his lavish lifestyle.
It was a major lawsuit and it seems Christopher Aitken is involved in it too. Surprisingly, there isn’t any additional information on whether Christopher won this lawsuit or lost it.
Running and promoting a Ponzi scheme isn’t a small crime. On top of that, the guy is still operating as a financial advisor.
I guess this is why he is now facing another lawsuit as part of a class action lawsuit against UBS. The next section of my article onChristopher Aitken UBS, covers this class action lawsuit in detail:
The Class Action Lawsuit against Christopher Aitken and UBS
A few years ago, UBS Financial Services had launched a new investment program called the Yield Enhancement Strategy.
The financial advisors at UBS marketed the YES program extensively to their clients. It’s an advanced short volatility / short option strategy. This strategy was unsuitable for investors who wanted income or had moderate or low risk tolerance.
However, many UBS advisors disregarded their clients’ requirements while recommending the YES program. In the Fall of 2018, the YES program plummeted and lost around 20% of the capital the investors had invested.
Many people lost their investments because of the YES program.
The advisors marketed this program aggressively because it offered a 1.75% investment advisory fee. In other words, it filled their pockets more.
So they ignored the requirements of their clients and suggested an unsuitable investment to them.
If Christopher Aitken had recommended you to invest in the YES program and you suffered losses or received poor results because of it, contact your attorney. You can mitigate your losses.
The estimates say that around 1500 clients had lost their investment because of the YES program.
Investors all across the nation are filing lawsuits against UBS and its financial advisors because of this program.
In December 2020, UBS had to pay $90,000 to an investor for recommending the YES program to them even though it was unsuitable for them.
Christopher Aitken and the YES Lawsuit
It seems Christopher is no different from the advisors I talked about.
He’s facing a lawsuit for recommending the YES program to a client while knowing it didn’t match their requirements:
Here, Christopher had recommended the YES program to an elderly married couple. The husband was approaching retirement and wanted to invest his portfolio in low-risk, conservative investments.
Chris’s clients wanted to preserve their retirement savings. Aitken had assured them that he would employ a low-risk and conservative strategy and claimed that they had hit a home run.
Even though he assured them that he’d make conservative investments with their funds, he invested in the YES program. It was riskier and unsuitable for the elderly couple.
As a UBS investor, Chris focused on selling the lucrative YES program probably because he wanted to earn more. However, in doing so, he put the elderly couple’s funds at excessive risk. And they ended up losing their investment in 2018.
This is why Chris is now facing a lawsuit.
It’s why I told you to check with your attorney if Chris had suggested the YES program to you before 2018.
Red Flags in Christopher Aitken’s Services
When you hire a financial advisor, you expect them to care about your financial goals and requirements? After all, it’s their duty.
But if your advisor would make more money if they ignored your interests, would they be trustworthy?
In most cases, the answer would be no.
That’s because in such an instance, the financial advisor would be prone to giving you flawed and biased investment advice.
Christopher Aitken has the same issue. In fact, he has a lot of issues. In the following points, I have illustrated the various conflicts of interest you’d face while working with him:
The biggest red flag in Chris’s services is he makes money from commissions. There’s a huge difference between earning from fees and earning from commissions.
When your financial advisor earns from commissions, they get a percentage of the investment they recommend to their clients.
This means, they make money when they “sell” an investment to you. This is similar to the pay structure of a sales professional.
You can understand why this would be problematic. Commission-based compensation can influence your advisors’ recommendations heavily. It would be more rewarding for them to suggest investments that offer them higher commissions, instead of suggesting them according to your financial requirements.
Christopher Aitken UBS is a broker-dealer. This means he can charge you hidden fees which would increase costs and would certainly be unethical.
Apart from hidden fees, being a broker-deal creates a ton of other conflicts such as revenue sharing from mutual funds, cross-selling of commissioned products, or sale proprietary investments.
As you can see, it can skew the financial recommendations your advisor gives to you.
If they make money from the investments they suggest, certainly, you can’t trust their suggestions.
It’s similar to working with a salesman. If the salesman gets a better commission on a certain product, he would definitely recommend that product over others.
But you pay the fees to work with a financial advisor, not a salesman, right?
Christopher Aitken offers 12b-1 Fees
As a UBS advisor, Christopher offers mutual funds that charge 12b-1 fees. The 12b-1 fee is the marketing and distribution fee and usually goes into the pocket of the advisor.
Moreover, the returns of mutual funds with 12b-1fees and the returns of mutual funds without this fee are similar. You don’t get any benefit for paying the extra fee.
The SEC had conducted a research to compare the returns of the two types of mutual funds. They didn’t find any difference between the returns of mutual funds with 12b-1 fees and without 12b-1 fees.
In fact, you’d get poorer results with mutual funds with such fees because you’d be paying extra, and so, incur additional costs.
Chris Aitken is an insurance broker.
He has monetary incentive for suggesting insurance products to his clients. It would certainly influence his insurance recommendations.
It would be financially more rewarding for him to suggest needless insurance products to his clients. You’d think he is recommending the insurance because he cares about your finances. But in reality, he’d only be focused on his commissions.
In such cases, the advisor is more likely to recommend investments that are unsuitable for their clients.
Chris Aitken sells Proprietary Investments
UBS is a huge financial enterprise. And it has a ton of proprietary investments.
As a UBS financial advisor, Chris has incentive for promoting and “selling” UBS’s proprietary investments. It would be more lucrative for him regardless of his clients’ welfare.
Consider the YES program for example. It’s a UBS product and offers high commissions to UBS advisors. That’s probably why so many UBS advisors ignored their clients’ requirements and suggested the YES program to them.
Now, many of those clients, who suffered huge losses, are now filing lawsuits against these advisors. Keep in mind that Chris is one of them. He is also facing a lawsuit for recommending the YES program while ignoring the clients’ requirements.
Also, when an advisor earns from recommending proprietary investments, they might ignore many lucrative investments simply because they don’t belong to their bank.
So, as a Chris Aitken’s client, you might be missing out on many attractive investment opportunities.
Performance-based fee structure is a huge red flag in the investment community. When an advisor follows this fee-structure, they earn money only when they outperform an index (or another benchmark).
Even though it seems attractive, performance-based fee structure incentivizes the advisor to follow high-risk strategies. Such strategies put you at excessive risk and could seriously harm your finances.
A study found that mutual funds following a performance-based fee structure take unnecessary risks while offering poor results.
In a down market (like the current pandemic-ridden one), high-risk strategies could wipe out a huge chunk of your invested capital instantly.
This is why the Congress had passed the Investment Advisers Act for RIAs in 1940. It banned performance-based fees for financial advisors.
The SEC in 1985, allowed RIAs to follow this compensation structure only for qualified clients. So, even the legal history of this fee structure shows that it’s suspicious.
Christopher Aitken charges performance-based fees. It’s highly likely that he’s putting his clients at unnecessary risks.
Chris is a UBS financial advisor. Hence, he might suggest securities that UBS has recently taken over. It can influence his recommendations significantly.
Because promoting those products would be more beneficial for him financially.
Similar to the commission-related conflict, this red flag is also related to the advisor’s priorities. Would he prioritize your financial success or his wallet?
Christopher performs side-by-side management. Side-by-side management means a financial advisor manages the accounts of both large as well as small clients.
This incentivizes the advisor to favor larger funds which leads to unequal trading costs and unfavorable trade executions for retail clients.
It’s a prominent red flag because it affects the advisor’s service-quality.
If a financial advisor performs side-by-side management, chances are, they offer subpar advice to smaller retail accounts as they would prefer working with larger funds.
Christopher Aitken Trades Recommended Securities
One of the biggest red flags in the offered services of a financial advisor is this one. If a financial advisor trades recommended securities, you should be wary of them.
Trading recommended securities means the advisor suggests the securities they trade for themselves.
It leads to numerous conflicts of interest.
For example, it could lead to front running. Here, the advisor trades specific securities and then recommends them to their clients to manipulate the returns for themselves.
The issue with this red flag is many clients don’t know their advisor trades recommended securities. It’s also possible that the advisor might suggest securities that match their financial requirements instead of their clients’.
Why do these Red Flags Matter?
Listing out these red flags was important. Because many clients aren’t aware of these conflicts of interest.
You must’ve noticed that most of these issues influence your advisor’s quality of advice.
Ideally, your advisor would care about your financial requirements only. However, with such conflicts of interest in place, it’s much more beneficial for them to ignore your financial requirements.
And keep the numerous lawsuits in mind. Christopher Aitken UBS is facing a ton of issues already.
He doesn’t have a clean record. His clients have sued him on multiple occasions because of misrepresentation.
These red flags suggest why Chris misrepresented those clients.
Knowing about these ethical conflicts would help you determine if it would be best for you to work with Chris Aitken or not.
I wrote this review of Chris Aitken and his firm, Aitken & Associates’ services to help you and others know about the full picture.
Financial advisors don’t want their clients to know about the different lawsuits they are facing. They don’t want them to know about the various ethical conflicts their services have.
Because if you knew about the $11 million lawsuit or the elderly couple who lost their retirement savings because of the YES program, you probably would avoid them.
I would reiterate, if you’re a client of Christopher Aitken UBS and you had invested in the UBS YES program, causing you to face losses, you should contact your attorney.
Christopher Aitken is a UBS financial advisor with numerous ethical conflicts. He is facing a lawsuit for misrepresenting an elderly couple and has a customer dispute in his FINRA BrokerCheck profile. Certainly, it would be best to avoid him.
- Has a lot of experience
- Has a disclosure in FINRA BrokerCheck
- Facing a lawsuit for misrepresenting an elderly couple
- Faced a $11 million lawsuit
- Has various ethical conflicts