The Balog Group – Morgan Stanley – A Nightmare

While looking for a new financial advisor, you should do a thorough research on the available options. Every advisor will tell you the advantages of working with them but no one will highlight the drawbacks. To help you narrow down your search, I’ve written the following review on the Balog Group Morgan Stanley. 

It is among the most predatory financial advisory firms in Laguna Niguel. The firm’s leadership has a history of legal disputes and the firm itself uses various shady provisions to trap its clients into compromising situations. 

Read on to find out everything this firm tries to hide from its current and prospective clients: 

About the Balog Group Morgan Stanley 

The Balog Group Morgan Stanley is a financial advisory firm based in Laguna Niguel, California. Their office is located at 28202 Cabot Rd Ste 500, Laguna Niguel, CA 92677, US and their contact number is 949-365-5306. 

This firm claims to work closely with its clients to create comprehensive financial plans and wealth management strategies. They offer multiple services here including cash management, business succession planning, alternative investments, lending products, asset management, retirement planning, and life insurance. 

The prominent people at this firm are Anouchka Balog, Christopher Mullery, Ritamarie Kikawa, and Steven Anderson. Anouchka Balog is the managing director at this firm. 

Even though this firm makes boastful claims about prioritizing its clients’ interests over anything else, the disclosures tell a whole nother story. According to the terms and conditions of the Balog Group Morgan Stanley 

Issues Present in the Balog Group Morgan Stanley

Before you start working with any financial advisor, you should look them up on FINRA BrokerCheck, a database where you can find out a lot of information. You can learn about your advisor’s experience, qualifications, and if they’ve faced any legal disputes in their career. 

Anouchka Balog’s FINRA BrokerCheck shows two disputes. The first dispute occurred in 2003 where the client alleged misrepresentation in annuity investment. Anouchka’s client also complained that she failed to follow specific investment instructions in March 1999. 

The client had requested $50,000 in damages but nothing happened because the client died before the dispute could reach a conclusion. 

Her most recent dispute occurred in 2004 where the client alleged unsuitability and breach of fiduciary duty between 1997-1998. Here, the client requested $50,000 in damages but Anouchka denied the allegations and nothing happened. 

Apart from this information, there isn’t anything available on the second dispute. 

Skilled financial advisors don’t face any disputes in their careers and Anouchka Balog has faced two. This shows how professional and caring she truly is. 

Her current disclosures suggest that she hasn’t improved on anything. However, it’s more difficult to file a legal dispute against her now because you agree to the following unfavorable conditions when you sign on as a new client. 

Unsuitable Fees for Large Portfolios

The Balog Group Morgan Stanley offers many investments that charge 12b-1 fees. This is a marketing fee which doesn’t add any value to the investment. Many people think that if an investment costs more than others, it would offer better returns. But that’s not the case with investments that charge a 12b-1 fee. 

An SEC study found no difference between the returns of investments that charge this fee and those that don’t. 

Advisors promote such investments because the 12b-1 fee goes straight into their pockets. 

Putting Clients at Excessive Risk

The Balog Group of Morgan Stanley charges performance-based fees. When your advisor follows this fee structure, they earn money only when they outperform a specific index.

Hence, they focus on implementing high-risk strategies as they compromise long-term growth over short-term results. This can be quite damaging for most portfolios, especially low-risk and long-term ones. 

High-risk strategies are unsuitable for most portfolios but your financial advisor can get away with implementing them because you “understand all the risks” when you sign on as a client. 

This is why very few legal disputes end in the favor of the claimant. You should always read the fine print very carefully when working with a financial advisor. 

Because performance-based fees incentivizes the advisor to implement high-risk strategies, there’s simply no reason why they would ignore employing them. 

Another drawback of high-risk strategies is they can wipe out a large chunk of your invested capital instantaneously. If you suffer losses because of your advisor’s high-risk strategies, you can’t hold them liable for it because of the waivers you sign when you become a new client. 

These are the main reasons why it was illegal for fiduciaries to charge performance-based fees before 1985. 

Conclusion

The Balog Group has a plethora of red flags you simply can’t ignore. From charging a redundant fee that’s particularly damaging for large portfolios to putting clients at excessive risk, this firm does everything wrong you can think of.

It’s very difficult to trust an advisor who earns more when you’re at a higher risk. Similarly, you can’t rely on the word of the advisor about your charges if they have provisions in their agreements that let them charge hidden fees. 

These issues add up over time and considering how much this firm focuses on “long-term” clients, it’s not a good place for any investor. 

Due to these reasons, you should look for a different firm and ignore the Balog Group Morgan Stanley altogether. 

2.6Expert Score
Not recommended

The Balog Group Morgan Stanley is a dangerous firm with too many red flags. They put you at excessive risk and allow themselves to charge hidden fees. All of these issues suggest that it would be best to avoid this firm altogether.

Trust
3
Service
3
Experience
2.5
Concern for Clients
2
Pros
  • None
Cons
  • Greedy
  • Multiple legal disputes with clients
  • Charge hidden fees
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