Friday, October 13, 2017

More Morgan Stanley Questionable Terminations

 Our readers may have missed this article, since the headline does not point out the problem. AdvisorHub has an article regarding a shakeup in the Morgan Stanley offices in Virginia. Apparently there is another shift in Branch Office Managers.



However, the article also references that the broker was discharged for “management loss of confidence related to sales practice concerns including delays in converting accounts to fee-based platforms.”



What? Not moving your accounts to fee based accounts quickly enough is grounds for termination?



Unfortunately, we are seeing more and more of this lately. We understand the benefits of fee based accounts, FOR SOME CLIENTS. In fact, we have been advising clients for years to move to a fee based model.



However, there are numerous types of accounts that do not benefit from that model - in fact, any account that does not trade on a regular basis probably doesn't benefit from the model, unless the broker is providing ongoing advice which would be paid for by the fee based model.



But that is not the point. Morgan Stanley is using the move to fee based portfolios as a reason for termination, and it is not just the broker in this article. "Management loss of confidence" is the new termination reason, and it is simply not enough to support a termination.



Of course, the firms don't care, they want assets, and arbitration panels do not take this scam seriously. Firms are doing this to steal assets, plain and simple. 



This is something of an industry wide issue, and always has been, at least with the wirehouses. A BOM actively recruits brokers from another firm, promises them all sorts of things, and claims that they can't put it in writing. The brokers rely on the BOM's promises, transition to the firm, and start moving their accounts.



Then the BOM is replaced, and the new BOM claims no knowledge of the oral promises, leaving the broker with no remedy.



The solution of course is to get it in writing, or don't move, but that doesn't happen.



Now we are seeing a variation. Management has a "loss of confidence" in something. Moving accounts to fee based, explaining charges, whatever. Is the next termination reason management's loss of confidence in a broker's ability to write neatly?





Senior Morgan Stanley Broker in Virginia Leaves Amid Branch Manager Shuffle - AdvisorHub: