Avoid Scot Benefiel Merrill Lynch Wealth Management Advisor

If you’re looking for a financial advisor in Phoenix, Arizona, you might come across Scot Benefiel Merrill Lynch. He is a CPFA certified financial advisor who claims to help his clients achieve their financial goals with ease. 

Before you start working with any financial advisor, it helps to know the shady provisions present in theri terms and conditions. This way, you’ll be able to make a well-informed decision on this matter: 

About Scot Benefiel Merrill Lynch

Scot Benefiel of Merrill Lynch is a wealth management advisor based in Phoenix, Arizona. His office is located at 14636 N Scottsdale Rd, Scottsdale, AZ 85254, US and it opens from 7:30 AM to 3:30 PM on weekdays. 

The contact number of Scot’s office is 480-624-0437. 

Scot claims to focus on understanding his customers’ needs and requirements. However, his disclosures tell a whole nother story. 

At Merrill Lynch, Scot is a senior vice president and senior financial advisor. Below are the prominent issues present in Scot’s disclosures:

Red Flags in Scot Benefiel Merrill Lynch’s Disclosures

$270,000+ Dispute with Client

A search on the FINRA BrokerCheck database shows that Scot Benefiel has had two disputes with his clients in the past. Before working with any investment advisor, it’s best to look them up on this database. It shows you their professional qualifications, theri employment history, and the disputes they’ve had with their clients. 

Skilled advisors usually have no disputes on their profile. Scot has 2, which is a very bad sign. 

The first dispute was in 2003 where the client alleged breach of fiduciary duty, misrepresentation, and omissions of material facts. Scot and Merrill Lynch had settled this case for $275,000 giving the excuse that the litigation would have cost more. 

His second dispute happened this year and it was denied. The client alleged that Scot didn’t have his best interests in mind when purchasing stocks. Scot denied these allegations and claims the client is still maintaining a professional relationship with him. 

Note that both of these issues pertain to lack of care towards clients. As you’ll read the following troubling provisions in his disclosures, you’ll realize why it’s easier for Scot to ignore your interests: 

Performance-based Fees

Scot Benefiel Merrill Lynch charges performance-based fees. This means, he earns when he beats a specific benchmark or index. Following this fee structure might seem lucrative on paper but in practicality, it’s horrible. 

Performance-based fee compels the advisor to pursue high-risk strategies so he can beat the benchmark. High-risk strategies may yield greater returns but only “if” they work. 

Such strategies can also cause you to suffer significant losses or get poor returns. Furthermore, you can’t hold your advisor liable for causing you these losses because you sign a waiver when you start working with your advisor.

Due to the dangerous nature of the performance-based fee structure, the Congress had banned it in the 1940s. The SEC made it legal in 1985 and that too, only for specific clients. 

This alone is a huge red flag in Scot’s disclosures. 

12b-1 Fees Conflict

As a part of Merrill Lynch, Scot can offer investment products that charge 12b-1 fees. This is a marketing fee and it goes in the pockets of the advisor. 

The 12b-1 fee increases the cost of your investment but doesn’t offer any benefits for the added cost. This fee might add up over time and adversely affect your portfolio. Hence, it’s a bad choice for the long run. 

Selling Proprietary Products

According to his disclosures, Scot Benefiel can earn commissions from the sale of proprietary and affiliated investment products. Proprietary products can greatly affect the judgement of an advisor as they offer substantially higher commissions than other investments. 

These investment products limit the securities an advisor can recommend to their clients. Hence, it can cause you to miss out on a lot of great investments and returns, simply because they weren’t in the product catalog of your advisor. 

Commission-based Earning

Apart from selling proprietary products,Scot Benefiel Merrill Lynch can earn from various other commission sources. Earning from commissions can lead to various conflicts of interest.

It incentivizes the financial advisor to ignore his client’s interest and focus on his own. 

Cross-selling of commissioned products, unnecessary insurance, suboptimal recommendations, unsuitable financial advice are some of the many issues that can arise because of commission-based earning. 

Trusting advisors who earn from commissions is difficult because of these issues. If you’re a client of Scot Benefiel, it would be best to review your investments and see which of them offer commissions to his firm.

Summary

Scot Benefiel Merrill Lynch is not an exceptional financial advisor. He may claim to care about his clients and their interests but his disclosures disagree. Also, he has had major disputes with his clients in the past. 

All of this suggests that it would be best to avoid him and find a different advisor who actually cares about your financial requirements. 

2.6Expert Score
Horrible

Scott Benefiel’s terms and conditions have too many red flags to count. He benefits from putting his clients at excessive risk and charges extra fees for no reason other than his profits. It would be better to find a more caring and professional advisor.

Trust
3
Experience
2.5
Ethics
2.5
Concern for Clients
2.5
Pros
  • None
Cons
  • Charges 12b-1 fees
  • Charges performance-based fees
  • History of disputes with clients
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