Finding a trustworthy wealth advisor might be difficult due to the prevalence of unscrupulous players in the market. Chudom Hayes Wealth Management, Morgan Stanley, is one dodgy advice firm you should steer clear of.
When the company makes improper advice to its clients, it benefits financially and the clients lose. In the following analysis, you will learn precisely what is wrong with this company and why you should stay away from it.
Wealth Management by Chudom Hayes: An Introduction
Oak Brook, Illinois is home to Chudom Hayes Wealth Management, a financial advice firm. You may reach them at 630-573-9680 or visit their office at 2211 York Rd Ste 100, Oak Brook, IL 60523, USA.
Chudom Hayes Wealth Management claims to assist its client families prioritize the things in life that truly matter to them. They provide a wide range of financial planning services, such as minimizing taxes, saving for retirement, planning for higher education and retirement, maximizing social security benefits, and leaving a lasting legacy.
Extras that can be provided are:
- 529 plans
- Life cover
- Preparing for Retirement
- ETFs and FIs in Financial Strategy
- 401(k) transfers
- Analyzing the Money in a Divorce
This company is headed up by Kyle Chudom. Other than Kyle, the names Eric Hayes, Sean Graft, Ryan M. DeProsperis, Mary C. McGovern, and Julia Schulz come to mind when discussing the famous people who work here.
The company asserts that it can relieve its clients of financial anxiety. However, they achieve this by adding more stress to their customers’ lives. According to the information provided by Chudom Hayes Wealth Management Morgan Stanley, the company benefits financially when its clients take on greater levels of risk.
You’ll get a comprehensive breakdown of how it occurs in the following section of this review.
Hidden Problems at Chudom Hayes Wealth Management
Caused a $5,000,000 Lawsuit
You should check the advisor’s history on FINRA’s BrokerCheck before signing on with them. There you can research a financial advisor’s employment history, state licenses, credentials, and disciplinary actions.
Kyle Chudom has had one customer dispute listed on his FINRA BrokerCheck profile. This happened back in 2001. In this case, the client alleged that he had made fraudulent charges to her account totaling a little over $5,000,000.
But the company said the client’s complaint was without basis, so she dropped it.
Warning signs include being sued for $5,000,000 because of fraudulent activity on a client’s account. This indicates that Kyle Chudom frequently disregards his client’s wishes. He is not as trustworthy as he seems to be.
Dealer-Broker Tensions
Chudom Hayes Wealth Management Morgan Stanley’s advisors are licensed in both financial advisory and securities brokerage. A red flag is raised when one investment can result in two different types of compensation (asset-based fees and transaction-based commissions). Other concerns include preferential treatment for linked mutual funds and income sharing with mutual funds.
Regulators are constantly working to keep such advisors in control, but they have their limits. Brokers that are dually registered often charge more fees to their retail RIA clients than to their brokerage clients. They offer the same underperforming mutual funds to brokerage clients that they prefer selling to institutions as institutional share classes.
Studies have shown that advisors who are also brokers do not always act in their client’s best interests. As a result, you shouldn’t count on Chudom Hayes Wealth Management for flawless service and attentiveness.
Paying for Results
This financial advisory firm’s use of performance-based fees is a major drawback. Advisors that charge a performance fee don’t get paid until they achieve a predetermined level of success.
The fee structure appears to be advantageous for investors at first glance. But it’s a terrible nightmare.
That’s because it encourages the advisor to recommend risky investments even if the client doesn’t need or want them. Positive returns from high-risk methods are possible in the short term, but they are not sustainable.
Investment returns are often negative, and the success rate of such approaches is quite high.
According to studies, advisors who get paid depending on how well their customers do tend to take on more risk, which is bad for their clients’ results. Those with a low-risk tolerance who prioritize safety over returns should avoid this investment vehicle due to its high fees.
You also have no legal recourse against your advisor if losses exceed a certain threshold because of his recommendation of high-risk techniques. However, your advisor might charge you exorbitant fees if the investments produce a profit.
That’s why you should never work with an advisor that bases their payment on how well they perform. Unfortunately, Chudom Hayes Wealth Management is included in this group.
Conclusion
Chudom Hayes Wealth Management, in general, Morgan Stanley is a poor choice for financial advice. In the pursuit of profit, it places its customers in unnecessary danger. Furthermore, it has been the subject of significant legal controversy in the past.
For these reasons, you should go elsewhere than Chudom Hayes Wealth Management for financial advice.
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