The Chase Group Morgan Stanley is a Scam

The Chase Group Morgan Stanley is a financial advisory firm run by Andrew Chase. It is a branch of the prestigious bank, Morgan Stanley but before you consider working with them, you should familiarize yourself with the issues present in their disclosures. 

I’ve shared some of those issues below to help you formulate a well-informed opinion on this firm: 

About The Chase Group Morgan Stanley:

The Chase Group Morgan Stanley is a financial consultancy firm based in California. Its address is 2725 Sand Hill Rd Suite 100, Menlo Park, CA 94025, US and the contact number is 650-234-2901.

The managing directors of the firm are Andrew Chase and Dan McCormick. They offer investment management, lifestyle advisory, wealth transfer, and many other services. 

While the firm seems like any other financial advisory team at first, there are a ton of things that it tries to hide from unsuspecting investors. Below are some of the various issues present in the Chase Group Morgan Stanley you must know: 

Issues in The Chase Group Morgan Stanley You Should Know

Questionable Leadership

Before you start working with any financial advisor, you should look them up on FINRA BrokerCheck. This database tells you about the specific advisor’s qualifications, professional history, and the disputes they’ve had with their clients. 

When you look up the managing director of the Chase Group Morgan Stanley on FINRA BrokerCheck, Andrew Chase, you’ll see two disputes on his profile. 

The first dispute is dated 6-1-2006 and the client alleges that she didn’t give specific orders to sell two stocks on 21st April 2006 and purchase five stocks the same day. Furthermore, the client alleged that Andrew had done the same on two other instances (23rd May and 25th May). 

Andrew had settled this matter and paid the requested damages in full. The client had requested $55,183 in damages. 

His second dispute is dated 8-29-2012 and here the client alleged that she never placed a firm order for shares allocated to her in a public stock offering in May 2012. Andrew settled this case for $38,640. He blamed his staff for this oversight. 

Having multiple disputes with the clients for ignoring their interests and consent is a big red flag. 

Charging Extra Fees

The Chase Group Morgan Stanley offers products that charge 12b-1 fees. The 12b-1 fee is a marketing fee which doesn’t add anything to the investment’s value. This fee usually goes in the pockets of your advisor.

The 12b-1 fee increases the cost of your investment but doesn’t offer any benefits for the same. The SEC had conducted a detailed study to compare the returns of mutual funds that charge 12b-1 fee and those that don’t. 

It found no difference in the generated returns of the two. Instead, it concluded that investments that charge this fee are inferior because they cost more.

“Selling” Products

Andrew Chase and his firm are a part of Morgan Stanley. So, they can earn hefty commissions from selling the proprietary products of the bank. 

Ideally, your advisor would focus on understanding your financial requirements and suggest investments accordingly. However, in these cases your advisor has incentive for ignoring your interests and recommending investments that generate more commission. 

Selling proprietary and affiliated products can introduce heavy bias in an advisor’s suggestions. Take the case of Christopher Aitken for example. He is a UBS advisor who recommended UBS’ YES strategy program unnecessarily to clients who didn’t need it. Now, he is facing a lawsuit for doing the same. 

Earning from Commissions

The advisors at this firm make a lot of money from commissions. Earning from commissions can lead to multiple conflicts of interest and make things very complicated for the client. 

This includes, cross-selling of products, unnecessary insurance, unsuitable advice, and misrepresentation. 

Even one of these conflicts can cause you to incur significant losses and ruin your financial growth. That’s why you should be wary of working with an advisor who sells products that offer him commissions. 

If you’re already a client of the Chase Group Morgan Stanley, it would be best to review your investments and see which of them generate commissions for those guys. 

Putting Clients at Risk Unnecessarily

A prominent issue with this firm is that it charges performance-based fees. This fee structure incentivizes the firm to employ high-risk strategies and ignore their client’s interests. 

It’s particularly dangerous for clients who want to follow a medium-risk or low-risk approach. High-risk strategies can wipe out large chunks of your invested capital instantaneously. That’s why they aren’t suitable for most investors. 

What’s worse is that you can’t hold your advisor responsible for incurring such losses. It creates a compromising situation for the client while allowing the advisor to charge a hefty fee. 

Conclusion

The Chase Group Morgan Stanley is not an attractive firm. They seem like a great prospect at first but the list of their flaws is too long. From having a history of disputes to selling proprietary investments, the firm has a ton of red flags which make it unsuitable for most investors. 

If you’re looking for a financial advisor in California, look elsewhere. 

2.6Expert Score
Avoid Andrew Chase and his firm

The Chase Group Morgan Stanley has various issues. It charges performance-based fees, puts clients at excessive risk, and has no regard for its clients’ financial future. Beware of such advisors.

Trust
2
Service
3
Experience
3
Concern for Clients
2.5
Pros
  • None
Cons
  • Charge performance-based fees
  • Earn from commissions
  • Have incentive for ignoring the clients' interests
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