The Burbank Group is a Morgan Stanley branch office run by Mike Burbank. You might come across their name while looking for investment advisors in San Francisco and the nearby locations.
At first, this firm seems like any ordinary financial advisory firm. But they have many skeletons in their closet. The following review of the Burbank Group Morgan Stanley will expose some of those skeletons and help you determine whether you should trust them with your financial future or not:
About the Burbank Group Morgan Stanley
The Burbank Group of Morgan Stanley is a financial advisory firm based in San Francisco, California. Its office is located at 555 California Street 14th Fl, San Francisco, CA 94104, US and the contact number is 415-576-2004.
Mike Burbank is the managing director of this firm. He has CIMA and CFP certifications. Other notable professionals at this firm are:
- Scott Hafeli, CFA (Senior Vice President)
- Wills Davis, CFA (Private Wealth Advisor)
- Cate Rachford (Group Director and Vice President)
Note that Mike Burbank has changed his name. His full name is Robert Mike Burbank and uses his middle name in most instances because of the negative attention he attracted before.
As you’ll find out later in this review, Mike Burbank aka Robert Burbank has had a major legal dispute with one of his clients. Some of the services his firm offers include investment management, pre-liquidity planning, comprehensive wealth planning, family governance & wealth education, and more.
The firm claims to deliver personalized service, resources and experience to help affluent families address complex wealth management issues. However, their disclosures say otherwise.
Issues Revealed in the Disclosures of the Burbank Group Morgan Stanley
Mike Burbank’s $20,000 Legal Dispute
People rarely change their names, especially financial advisors. That’s because their brand de[pends solely on the popularity and reputation of their name. Mike Burbank changed his name from Robert Burbank because of the negative reputation he had garnered.
He had a legal dispute with one of his clients in 2006. The client alleged that he believed he made an investment in the enhanced cash management program when his funds had been invested in the tactical bond portfolio fund. They hadn’t specified any damages.
The case was settled for $20,442.28 by restoring the original capital.
Mike’s FINRA BrokerCheck profile doesn’t reveal any additional information about this dispute.
Did You Know?
Financial Industry Regulatory Authority is a private self-regulatory American corporation, regulating the member brokerage firm and exchange market.
Investing your client’s funds in a totally different security is a huge error. It shows carelessness and a lack of concern for clients. There might be a lot more behind this legal dispute but Mike has removed this information.
He uses the name Mike Burbank so people would get confused when they look him up on FINRA BrokerCheck. It’s cunning for sure, but also very unethical.
What’s more unethical is the predatory provisions present in his disclosures. Below are some of those provisions, which you should know about:
Charging 12b-1 Fees
12b-1 fee is a marketing fee that goes into the pockets of the broker or the advisor. This fee doesn’t add any value to the investment’s value or performance. It is an “incentive” for the financial advisor so they would promote it more than other securities.
For the client, it’s a horrible arrangement because it introduces multiple issues. First, it makes the advisor biased because they might ignore truly suitable investments simply because they don’t have a 12b-1 fee attached to them.
Second, it increases the cost of investments. The 12b-1 fee is a percentage fee that gets compounded over the years. It’s particularly damaging for large portfolios as it increases investment costs substantially.
Putting Clients at Risk Unnecessarily
Apart from the 12b-1 fees, the Burbank Group Morgan Stanley also charges performance-based fees. This means they have a monetary incentive for pursuing high-risk strategies.
High-risk strategies are unsuitable for large funds and funds that are looking for long-term security. That’s because they have a high chance of failing and causing severe losses.
Charging performance-based fees is heavily looked down upon in the finance industry and you should avoid any advisors who follow this fee structure. There are plenty of financial advisors who don’t follow this fee structure.
Salesmen, Not Advisors
Finally, the Burbank Group earns a lot of money through commissions. They earn these commissions through the sale of proprietary and affiliated products.
Ideally, your financial advisor would recommend you securities based solely on how they align with your financial goals. But when your advisor can earn commissions from recommending certain investments, they might ignore your financial goals completely.
Earning from commissions is among the biggest reasons why financial advisors give unsuitable advice to their clients and misrepresent them. Sadly, the Burbank Group Morgan Stanley suffers from this flaw as well. This is a common issue among many shady advisors. Winburn Wealth Management (UBS) also uses this tactic to leech money off of its affluent clients.
Should You Trust The Burbank Group of Morgan Stanley?
The Burbank Group of Morgan Stanley is definitely not the right choice for any family. Their predatory provisions and the questionable leadership will put you in a detrimental position in the long run.
Most of their shady terms and conditions are designed in such a way that you wouldn’t even realize you’re losing money until it’s too late. For example, the 12b-1 fee seems negligible but it increases according to the size of your portfolio and adds up over the years.
Such unethical and greedy behavior is not suitable for anyone, particularly for a boutique financial advisory firm. Hence, you should avoid dealing with this firm and find a truly reasonable and caring team of financial advisors.
