Joe Kartheiser Morgan Stanley is a Scammer

Joe Kartheiser Morgan Stanley is a Chicago-based financial advisor. He claims to focus on understanding his clients’ needs and giving them personalized recommendations. 

But his terms and conditions have many conflicts of interest which suggest otherwise. According to his disclosures, Joe doesn’t put his clients’ interests ahead of his own. Hence, before you hand him your business, it would be best to check these shady provisions. The following review will shed more light on these problematic provisions.

Who is Joe Kartheiser Morgan Stanley?

Joe Kartheiser Morgan Stanley is a financial advisor in Chicago, Illinois. His office is located at 233 S Wacker Dr Ste 8600, Chicago, IL 60606, US and his contact number is 312-419-3337. 

His firm claims to offer customized wealth management solutions to senior executives and high-net-worth entrepreneurs. Their primary focus remains on successful C-suite clients. Joe claims to understand the unique requirements of such clients and focus on providing simplicity and clarity to their finances. 

The firm claims to act as a personal CFO to its clients. 

Some of the various services they offer at this firm include: 

  • Business planning
  • Life insurance
  • Trust services
  •  Estate planning strategies
  • Financial planning
  • Executive benefit services
  • Alternative investments
  • Financial planning
  • Wealth management
  • Executive financial services

Apart from Joe, other notable people at this firm are Colin Cody, Mike Mangan, and James Van Cura. 

Even though this firm makes many claims to be sincere and client-focused, its disclosures tell a different story. There are numerous conflicts of interest in their terms and conditions. In the following section, you’ll learn about these conflicts of interest and the issues Joe Kartheiser Chicago is trying to hide: 

Faced a Dispute from Client

When you’re looking into a wealth advisor, it helps to check their professional history. This way, you can ensure that you’re working with a reliable service provider. 

To check a financial advisor’s professional history, you should visit their FINRA BrokerCheck listing. There, you will learn about their past disputes, the exams they have passed, and more. 

The FINRA BrokerCheck listing of Joe Kartheiser shows one dispute. It occurred in 2008. Here, the client alleged misrepresentation and failure to follow instructions regarding auction rate securities. 

However, no action was taken because the client was able to redeem his auction rate securities with no loss. 

Still, facing a dispute for misrepresentation is no small matter. It’s evidence that Joe has a history of ignoring his clients’ interests and as you’ll read his shady provisions, you’ll realize why he has incentive for ignoring your interests. 

Broker-Dealer Conflict of the Kartheiser Group

The first red flag in the disclosures of the Kartheiser Group is that Joe is dual-registered as a broker and an advisor. Dual-registered advisors expose their clients to many conflicts of interest such as revenue sharing with mutual funds, giving preference to affiliated mutual funds, and earning asset-based fees and transaction-based commissions from the same investment. 

While regulatory authorities are always trying to keep such advisors in check, they still get away with many shady practices. 

Dual-registered advisors tend to charge theri retail RIA clients higher fees than their brokerage clients. Also, they prefer institutional share classes of the same underperforming mutual funds they offer brokerage clients. 

Research suggests that dual-registered advisors fall short of the fiduciary standard. 

Hence, you shouldn’t expect to get quality recommendations and service from Joe Kartheiser Morgan Stanley. He has financial incentive for ignoring your financial requirements and recommending unsuitable investments. 

Putting Clients at Excessive Risk

Another problematic provision in Joe’s disclosures is that his firm charges performance-based fees. This is a highly notorious practice in the finance industry. 

Charging performance-based fees encourages advisors to implement high-risk strategies. That’s because when an advisor follows this fee structure, they make more money when they outperform a specific benchmark. 

High-risk strategies are capable of showing “good performance” in the short-term. But they are extremely dangerous for investors who want long-term growth. 

Research shows that advisors who follow this fee structure tend to double down on the risk and generate poor returns for their clients. Many advisors ignore their client’s risk tolerance while implementing such high risk strategies. 

This can be particularly detrimental to an investor during down markets. 

What’s worse is that if you suffer losses because of your advisor’s recommended high-risk strategies, you can’t hold him responsible for it. Thus, it puts the investor in a compromising situation. 

Summary

Joe Kartheiser Morgan Stanley has a history of misrepresentation and his firm’s current provisions put its clients in unfavorable situations. 

They have incentive for ignoring their clients’ financial requirements while making recommendations. Also, they earn more when they ignore the risk tolerance of their clients. 

All of this suggests that it would be wise to avoid working with this firm. You should find a different wealth advisor in Chicago and avoid Joe Kartheiser. 

2.9Expert Score
Unsuitable Investor

Joe Kartheiser Morgan Stanley has a history of misrepresentation and has multiple shady provisions in his disclosures. It would be best to find a different wealth advisor if you value your financial security.

Trust
2
Experience
3.5
Service
3
Concern for Clients
3
Pros
  • None
Cons
  • Faced a major dispute
  • Broker-dealer conflict
  • Putting clients at excessive risk
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