Buyer Beware

Jacqueline Willens UBS

Jacqueline Willens is a UBS financial advisor based in New York. She is the managing director of the Willens Group and has had several disputes with her clients. 

Her practice has a ton of ethical conflicts that make it quite difficult to trust her recommendations. 

The various conflicts of interest in her firm, The Willens Group’s terms and conditions indicate that Jacqueline might be giving subpar financial advice to her clients. Many of her clients, including you, might not even be aware of this. 

The following article will look at some of the things Jacqueline Willens UBS wouldn’t want you to find out. However, you should know all this so you can make a better-informed decision: 

Jacqueline Willens – Who is She?

Jacqueline WIllens is a UBS financial advisor and the managing director of The WIllens Group. She has been at UBS for 28 years and is among the most prominent female advisors in the industry.

However, her track record hasn’t been very great. She has a sketchy past as she faced multiple disputes and much more.

Her bio at the website of her firm, The Willens Group, doesn’t give much specific information about her except her praises. WIllens has been named in Barron’s Top 1200 Financial Advisors. 

She works with both institutional and retail clients. Other people who work at her firm include Cheryl Petrigliano (Senior Wealth Strategy Associate), Lynn Baker (Investment Associate), and David Wyss (Senior Wealth Strategy Associate). 

Jacqueline’s firm, The WIllens Group is based in New York. Its address is 1285 Ave of the Americas 15th, 16th, 17th, + 18th Floors, New York, NY 10019. 

She has been named in several Top Financial Advisors’ list of Barron’s and Forbes. Seeing her experience and accolades can make anyone think she’s the perfect advisor for their requirements. 

But there’s more to it. 

As you’ll see in this review, Jacqueline’s services have many flaws that you might be unaware of. On top of that, she has multiple disputes that make it difficult to trust her professional credibility. 

And let’s not forget, UBS advisors are facing a class action lawsuit too. 

Jacqueline Willens and Her Sketchy Past

Jacqueline Willens seems like an impeccable advisor, if you only look at her accolades. However, she has been involved in some very dangerous dealings, putting her clients at excessive risk. 

In 1997, Jacqueline was involved in a $7.5 million scam. A person named Richard A Scott, a coin-shop owner, had scammed around 100 people across the country. 

Many people had lost the bulk of their life savings because of Scott. Jacqueline Willens had suggested some of her clients to invest with Scott as well. 

Scott had told people that he had a close relationship with Jacquleine and claimed that it allowed him to get great returns on his investments. At that time, Jacqueline was working with PaineWebber. 

When the media asked Willens any questions, she directed them to the firm’s legal department. She couldn’t face anyone. 

Telling your clients to invest with a scammer isn’t good practice. It’s certainly not ethical. 

This puts the reliability of the Willens Group in question. How can you trust an investment advisory firm whose managing director was telling people to invest in a scam? I couldn’t. 

Jacqueline Willens UBS Disclosures

Every financial advisor has a FINRA BrokerCheck profile. This profile tells you about their past, their qualifications, and most importantly, their customer disputes.

This is why you should always check your advisor’s FINRA BrokerCheck profile. No advisor is going to tell you about their past disputes by themselves. 

They wouldn’t want to put themselves in a bad light. 

But it’s vital to check an advisor’s BrokerCheck profile because it tells you about their reality. 

Remember, even one dispute can be a significant one. 

In the case of Jacqueline, you’ll find two disputes on her FINRA BrokerCheck profile. 

First Dispute:

Jacqueline’s first dispute is dated 4/10/1997. It’s a consent order by the Maryland Division of Securities. According to the consent order, Jacqueline Willens has agreed to withdraw her registration as a broker-dealer, refrain from reapplying as a broker dealer, investment advisor, and comply with the Maryland Securities Act in the future.

In simple words, she can’t provide her services in the jurisdiction of the Maryland Division of Securities. 

She replied to this consent order by saying that she had no idea about Goldie’s (Scott, the scammer’s business) wrongdoings. In my opinion, it’s laughable because if she really had no idea, she wouldn’t have recommended it as an investment to her clients. 

On the other hand, if she really didn’t know, this means she doesn’t do proper research on the investments she recommends, which is highly unprofessional. 

In both cases, it shows Jacqueline might not be as competent as her accolades make her seem to be. 

Second Dispute:

The second dispute is also related to the $7.5 million scam Jacqueline was involved in. Here, PaineWebber, her employer, stepped in to settle the dispute. They didn’t want to deal with the notoriety of facing such a lawsuit. 

The dispute is dated 5/20/1996. Here, the client had alleged that certain investments in equities made between 12/93 and 4/95 were unsuitable. They required $127,947 in damages. 

PaineWebber settled the case for $35,000. 

The Class Action Lawsuit Against UBS Financial Services

You might think that the lawsuits I talked about are too old. But they were important to share. 

And currently, Jacqueline Willens UBS and her firm, might be liable to pay more damages. Why? 

Because of the UBS YES case.

UBS’s YES program, Yield Enhancement Strategy program, is a short volatility / short option strategy. It was unsuitable for investors with low risk tolerance or those who wanted income from their investment. 

However, because it offered an attractive advisor fee of 1.75%, many UBS advisors recommended this program to their clients regardless of their goals and requirements. 

In Fall 2018, the investors in the YES program lost around 20% of their invested capital. 

It was a case of pure negligence and greed. 

Estimates say that around 1500 UBS investors lose their investments because of the YES strategy.

If Jacqueline Willens had recommended you to invest in the YES program and it gave you poor results, you should contact your attorney. You can mitigate your losses.  

Investors all across the country are filing lawsuits against UBS Financial Services. Just recently, UBS had to pay $90,000 to an investor because of the YES program. 

Many people lost their investments or got poor results because of unsuitable recommendations. Financial advisors didn’t care for their clients’ requirements while suggesting the YES program. 

As a UBS advisor, there’s a good chance that Willens suggested this program to you or her clients. If so, it would have lost you a substantial amount of money. That’s why I recommend reviewing your investments and getting in touch with a financial lawyer. 

The Various Ethical Conflicts with Jacqueline Willens UBS 

Jacqueline Willens and her firm, The Willens Group have a plethora of ethical conflicts. However, many people might overlook these issues simply because of her accolades and her experience. 

Knowing about these conflicts in her services would help you realise why she isn’t the best financial advisor out there. 

These conflicts of interest incentivize her for ignoring her clients’ requirements. The following points will illustrate them better: 

Jacqueline Willens is a Broker-Dealer

Jacqueline is a broker-dealer. The prominent issue with broker-dealers is they have leeway to charge hidden fees. 

Hidden fees increase your costs significantly and you don’t even know about them. 

It also leads to additional conflicts of interest where the advisor can exploit their client. For example, revenue sharing from mutual funds, cross-selling of commissioned products, sale of proprietary investments, etc. 

In this case, the advisor doesn’t focus on your needs, they focus on their own. Instead of helping you find investments suitable for your financial requirements, they would recommend you investments from their affiliates. 

The $7.5 million lawsuit we discussed was based on a similar situation. Here, Jacqueline presumably recommended a scammer to her clients because it suited her interests. 

Makes Money from Commissions

Jacqueline’s and UBS’s terms and conditions suggest that she makes money from commissions. 

Note that there’s a huge difference between commissions and fees. When your advisor earns from commissions, they get a percentage of the investment they recommended to you. 

They get this commission from the company whose investments they “sell”. You can say that when an advisor earns commissions, they act like sales professionals such as a car salesman. 

However, when you’re dealing with a car salesman, you know they’ll get commissions from the sale of a car. But in the case of financial advisors, you probably wouldn’t know if your advisor is earning commissions from the investment they recommend to you. 

A huge problem with commission-based compensation is that the advisor will benefit more from recommending specific investments. It would influence their suggestions. 

And they might ignore your unique requirements and focus on their commissions. 

After all, you don’t expect to hire a salesman when you hire a financial advisor, do you? 

Jacqueline is an Insurance Broker

When your financial advisor is an insurance broker, it means they earn commissions from selling insurance products. 

In other words, they are insurance agents. 

This can cause many issues. First, it incentivizes the advisor to recommend insurance products that aren’t necessary. 

You’d think they care about your security while in fact, they only care about their earnings. 

Being an insurance broker also introduces commissions into play. Some insurance products would offer higher commissions than others. So, obviously, Jacqueline would recommend products that offer her better commissions instead of focusing on your requirements.  

Charges Extra Fees for Offering Same Returns

Jacqueline Willens UBS offers mutual funds with 12b-1 fees. 

The 12b-1 fee is a marketing fee and in most cases, it goes in the pocket of the advisor. This fee makes the mutual fund more expensive, forcing you to pay more. 

You might think because you have to pay more for this investment, you might get better returns. However, that doesn’t happen. SEC had conducted a research to compare the returns of mutual funds that charge 12b-1 fees and the returns of those that don’t charge this fee. 

They found no difference in the generated returns of both of these investments. In fact, your returns would actually be lower because you’d be paying an extra fee. 

So, you’d be paying extra without getting any additional benefits.

Puts Clients at Excessive Risk

Jacqueline charges performance-based fees.

When your financial advisor charges a performance-based fee, they get paid only after they outperform a benchmark (such as an index). On paper, this compensation structure might seem very lucrative. But it’s very dangerous. 

A performance-based fee structure incentivizes the advisor for pursuing high-risk strategies. Such strategies could seriously harm your investments. 

According to a study, mutual funds that follow a performance-based fee structure take unnecessary risks but offer poor results. A high-risk strategy is particularly dangerous in a down market (such as the current pandemic-ridden one). That’s because in a down market the high-risk strategy can wipe out a large chunk of your investment quickly. 

The legal history of performance-based fees isn’t any good either. The SEC started allowing advisors to follow this fee structure only in 1985 and that too, only for qualified clients. 

Before that, The Congress had banned it through the Investment Advisers Act for RIAs in 1940. They had done so to mitigate the use of high-risk strategies that harmed investors. 

Because Willens charges such a fee, it means she might be putting her clients at unnecessary, excessive risks. And such risks could cause those people to lose their entire capital instantaneously. 

Jacqueline Sells Proprietary Investments

UBS Financial Services is one of the biggest financial companies out there. It has a ton of proprietary investments and products. 

As a UBS advisor, it would be better for Jacqueline Willens to recommend UBS’s products to her clients, as they would offer better fees and commissions to her.  

In other words, she has incentive for overlooking her clients’ needs when recommending investments.

Take the case of the YES program for example. UBS’s YES program offers high commissions and it’s probably why many of UBS’s advisors ignored their clients’ requirements and recommended this proprietary product. Now, clients are filing a class action lawsuit against UBS because of the poor results this program offered. 

Moreover, when a financial advisor sells proprietary investments, it limits the diversity and number of investments options they provide to their clients. 

Generally, advisors who sell proprietary investments avoid recommending investments from other companies or non-affiliates. So, you miss out on many attractive opportunities. 

Recommends Affiliated Securities

Because Jacqueline is a UBS advisor, she can recommend investments that UBS has taken over. 

These investments would offer her high commissions, so she might ignore her client’s requirements while recommending them. 

This issue is similar to the commission-related issue I pointed out earlier. What would Jacqueline prioritize more, her clients or her wallet? 

Performs Side-by-Side Management

Jacqueline Willens and her firm, The Willens Group, perform side-by-side management. This incentivizes them to favor larger funds and leads to unfavorable trade executions and unequal trading costs for retail clients. 

It’s another red flag because it adversely affects the service-quality of the advisor. In most cases, a financial advisor that offers side-by-side management would offer subpar advice to their smaller retail accounts as they would prefer working with larger funds. 

According to her disclosures, Willens trades recommended securities. This means, she and her firm recommend securities that they trade for themselves.

It leads to multiple conflicts of interest.

Suppose your friend has a blog that rates the top 10 restaurants in the city. Would you trust their recommendations if you found that your friend is also the owner of several restaurants in that list? 

Certainly, you can’t trust your friend’s ratings. They would want to rate their restaurants over their competitors as it would benefit them more. 

Similarly, Willens would prefer recommending securities that would yield her more benefits. There are many ways an advisor can exploit this service. 

For example, they might be involved in front running. Here, the advisor trades particular securities before recommending them to you to manipulate their returns. Again, not many clients realise that their advisor is recommending them traded securities. 

And it’s sufficient reason to avoid working with a particular advisor. 

Why These Conflicts are Dangerous:

These conflicts are quite dangerous for multiple reasons. 

Every client is unique. They have their own financial requirements, situations, and goals. That’s why, the duty of a financial advisor is to understand the unique requirements of their clients and suggest investments accordingly. 

But when there are this many conflicts of interest, the advisor has more incentive to ignore their client’s requirements and focus on making more money.

Granted, every financial advisory firm is a business. But there’s a thing called business ethics. 

All the problems I shared above, focus on ethical conflicts only. And with so many ethical conflicts, you can’t trust the financial advisor. 

The UBS YES class action lawsuit is a great example of such a scenario. Those investors trusted their advisors but they didn’t know what advisors had in their minds. 

So, those investors lost around $120 million. Many people lost their life savings because of it. 

On top of that, most clients aren’t aware of these conflicts of interest. UBS hides these clauses deep in their terms and conditions. I pointed them out so you’d know what you’re getting into if you start working with Jacqueline Willens UBS or her firm, The Willens Group. 

Conclusion

Jacqueline Willens and the Willens Group have a ton of ethical conflicts. These conflicts of interest suggest that their clients are probably getting subpar or biased investment advice. 

Judging by her history (such as recommending a literal scam), I wouldn’t recommend working with The Willens Group.

However, if you’re a client of Jacqueline Willens and had invested in the YES program, I recommend contacting your attorney. That might help you mitigate your losses. 

Some financial advisors such as Glen Clemans, try to skew these pages with fake positive reviews. So keep an eye out for that because many advisors don’t want their clients to know about such information. 

3.5Expert Score
Jacqueline Willens Review

Jacqueline Willens and her firm The Willens Group have numerous ethical conflicts. She was involved in a $7.5 million scam too. All of this suggests she might not be a suitable financial advisor for you. Be wary.

Trust
3.3
Customer Service
5
Customer Experience
3.5
Reputation
3
Honesty & Transparency
2.5
PROS
  • Has many accolades
CONS
  • Multiple conflicts of interest
  • Involved in a $7.5 million scam
  • Had a consent order from Maryland Division of Securities

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