Wohlgemuth- Must Avoid at all cost?

If you’re looking for financial advisors in Washington DC, you might come across the name of Jim Wohlgemuth Morgan Stanley. He is a prominent advisor in the region who uses various unethical tactics to take advantage of his unsuspecting clients. 

Before you start trusting him with your financial future, it would be best if you learnt about these tactics. This way you’d know what you’re getting yourself into and whether you should really trust him or not. 

Who is Jim Wohlgemuth Morgan Stanley?

Jim Wohlgemuth Morgan Stanley is a financial advisor based in Washington DC. His office is located at 1747 Pennsylvania Avenue NW Ste 900, Washington, DC 20006, US and his contact number is 202-292-5430. 

Jim Wohlgemuth is the managing director of his firm and caters to wealthy families. The firm claims to take a holistic approach to help ultra-high net worth families with all aspects of their financial lives. 

They offer various services to their clients including risk management, family governance, comprehensive wealth planning, investment management, pre-liquidity planning, open-architecture platform, and more. The firm claims to help its clients grow and preserve their financial, social, and family capital. 

Even though his firm claims to care about its clients’ future, the manipulative and dangerous provisions present in their disclosures tell a whole nother story. They lead to various conflicts of interest which is why you should know about them. 

The next section of my review will explain these provisions in detail so you can understand the red flags present in Jim’s services more effectively.

$500,000 Dispute with Client

Whenever you start looking for a financial advisor, the first thing you should do is check their FINRA BrokerCheck profile. It’s a large database where you can find out everything you need to know about an advisor such as their industry experience, the exams they have passed, and the legal conflicts they have had. 

The FINRA BrokerCheck profile of Jim Wohlgemuth Morgan Stanley shows one legal dispute. It occurred in 2008 when the client alleged that Jim Wohlgemuth didn’t inform him of the liquidity of his auction rate securities investments. 

Jim Wohlgemuth Morgan Stanley

Jim’s Wohlgemuth firm settled the case for $500,000 complying with the FINRA Regulatory notice 09-12. 

Facing a $500,000 dispute is not a good sign. It is proof that JimWohlgemuth is not as reliable as he claims to be. Furthermore, it shows that Jim is a selfish advisor who doesn’t hesitate to ignore his clients’ interests for his own. 

The following provisions in his disclosures are additional proof that he just doesn’t care about his clients.

Charging Performance-based Fees

This firm charges you performance-based fees, a highly notorious practice in the finance industry. When an advisor charges performance-based fees, it means they earn money for beating a specific benchmark or index. 

On paper, a performance-based fee structure makes a lot of sense but in practice, it leads to a plethora of issues and conflicts of interest. For starters, this fee structure incentivizes the advisor to implement high-risk strategies regardless of their suitability for your portfolio.

High-risk strategies may outperform a benchmark in the short-term but they are terrible for long-term returns. 

In most cases, these strategies offer poor or negative (losses) returns to the investors. 

Furthermore, you can’t hold your advisor liable for recommending high-risk strategies. They can simply say you understood all the risks and get away with it. On the other hand, if the strategy works, your advisor can charge you hefty fees. 

Due to these reasons, charging a performance-based fee is heavily looked down upon. 

Charging 12b-1 Fees

Jim Wohlgemuth and his firm offer investments that charge 12b-1 fees. This is a marketing fee that reflects no value. It goes straight into the advisor’s pockets for promoting the investment.

The 12b-1 fees increase the cost of the investment substantially. Many people think that if an investment costs higher then it would offer higher returns but that’s not the case with the investments that charge this fee.

The SEC conducted a detailed study to compare the returns of the investments that charge a 12b-1 fee and those that don’t. It found no difference between the returns of the two. The study concluded that the ROI of the investments that charge a 12b-1 fee was worse because the cost was higher. 

In other words, you’ll be paying extra without getting anything in return. Moreover, because this fee goes in the pockets of the advisors, they usually promote the investments that charge this fee more. 

Another huge drawback of this fee is that it’s a percentage fee. This means the total fees you’ll pay will depend on the size of your portfolio. The bigger your portfolio, the more you’ll have to pay. 

This is a particularly huge issue for investors with large portfolios and Jim mainly caters to high-net-worth families. The 12b-1 fee also allows advisors to charge hidden fees due to the variable nature of this fee. 

You should avoid financial advisors who recommend investments that charge this fee. 


There are plenty of drawbacks to working with Jim Wohlgemuth Morgan Stanley. He has faced a $500,000 legal dispute with one of his clients and he charges performance-based fees. 

His firm has allowed itself to charge hidden fees. These are all major issues and most of his clients might not even be aware of them. 

As a cautious investor, it would be best if you avoided this firm altogether and found a different advisor. 

2.5Expert Score
Not Worth The Risk

Jim Wohlgemuth is a terrible financial advisor who uses shady tactics to leech funds off of his clients. It wouldn’t be smart to trust him with your funds. You should find a different advisor.

Concern for Clients
  • None
  • History of disputes with clients
  • Charges performance-based fees
  • 12b-1 fees conflict

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