The Davis Wealth Management Group Morgan Stanley (Updated 2023)
When you’re looking for financial advisory services, it’s best to avoid poor options beforehand. One such advisory firm that you should avoid is the Davis Wealth Management Group Morgan Stanley. This firm uses various illicit tactics to take advantage of its clients.
Furthermore, the leadership of this firm has a history of fraud and misrepresentation. Hence, before you trust them with your funds, it would be best to check their flaws:
The Davis Wealth Management Group: A Brief Introduction
The Davis Wealth Management Group is a wealth management firm based in Chicago, Illinois. Their office is located at 233 S Wacker Dr. Ste 8600, Chicago, IL 60606, US and their contact number is 312-419-3424.
Ted Davis is the managing director of this firm. Apart from him, other notable people at this firm include:
- Alan Panozzo (Assistant Vice President)
- Jason Darfler (Assistant Vice President)
- Michelle Jennings (Senior Client Service Associate)
The Davis Wealth Management Group Morgan Stanley specializes in retirement planning. It claims to have been helping families plan their retirement for several decades.
They offer retirement planning, financial planning, 401(k) rollovers, and asset management as part of their services. The firm claims to focus on earning your trust through the excellence they deliver through their retirement planning strategies.
While this firm makes many claims about caring about its clients, the truth is, they don’t. There are numerous conflicts of interest present in their terms and conditions. It would be best to check these conflicts of interest before you believe these claims and trust them with your hard-earned funds.
Red Flags in the Davis Wealth Management Group You Must Find Out
Ted Davis’ History of Fraud
Whenever you’re looking into a new firm, it helps to check its professional history. By doing so, you can determine if they are worthy of your trust or not. In the case of the Davis Wealth Management Group, I checked the backgrounds of their leadership on FINRA BrokerCheck.
It’s a vast database where you can get all the necessary information about an investment advisor. This includes information about their employment history, certifications, and their legal disputes with clients and authorities.
Ted Davis’ FINRA BrokerCheck listing shows one dispute. In 1994, he faced a lawsuit for misrepresentation (fraud) and excessive trading. The client alleged damages worth $23,921 and requested $25,160 as their damage amount.
Did You Know?
FINRA (Financial Industry Regulatory Authority) is an American corporation with private ownership. The firm is a self-regulatory organization that affects the member brokerage firms and exchange markets.
In this dispute, the court granted the claimant $17,885.71 in damages.
This lawsuit is proof that Ted Davis has a history of misrepresentation, which is a huge red flag. Advisors rarely face a dispute in their careers. Furthermore, they have so many legal loopholes to ensure these disputes end in their favor. Yet, Ted and his firm had to pay $17,885 for fraud.
You should be extremely cautious of such firms.
Selling Investments instead of Recommending Them
Ted Davis and his firm don’t just recommend investments to their clients. They sell them. As a part of Morgan Stanley, the Davis Wealth Management Group can earn commissions from selling its proprietary products. Furthermore, some of these products offer higher commissions than others.
Ideally, when you work with a financial advisor you expect them to recommend investments solely based on their suitability for your goals. However, earning commissions from certain products can introduce bias in this process as it alters the motivation for the broker.
The broker might ignore your financial goals and requirements to make an extra buck. Earning commissions from the sale of investment products is among the biggest reasons why financial advisors give unsuitable advice.
Charging Performance-based Fees
The Davis Wealth Management Group Morgan Stanley can charge you performance-based fees. In this fee structure, they make money when they outperform a specific benchmark or index. On paper, the performance-based fee seems quite attractive.
However, it has many disadvantages.
To outperform their benchmark, advisors tend to implement high-risk strategies regardless of their suitability for their client’s portfolios. High-risk strategies are quite detrimental for most investors.
These strategies generate poor or negative returns in most cases. Still, these strategies are particularly dangerous for investments looking for long-term growth.
What’s worse is that if you suffer losses because of your advisor’s high-risk strategies, you can’t hold him responsible for it. The waivers in your agreement ensure that they have no accountability for these strategies.
On the other hand, if these strategies work, you end up paying hefty fees. Certainly, charging performance-based fees is a highly unethical practice.
After going through the history of the Davis Wealth Management Group Morgan Stanley and checking its disclosures, it’s obvious that they are unreliable.
If you’re looking for a wealth advisory firm, you should go somewhere else because the Davis Wealth Management Group Morgan Stanley isn’t the right choice. You don’t have to stick with a tainted option when there are hundreds available.
The Davis Wealth Management Group is a great example of what a financial advisory firm should not be. They have too many red flags and they don’t seem to care about them. The firm relies on multiple unethical tactics to make money.
- Lost a lawsuit for misrepresentation and fraud
- Selling investments instead of recommending them
- Charging performance-based fees