If you live in Menlo Park, California, and are looking for a financial advisor, you might come across the McKelvy Group Morgan Stanley. This company, which is run by Dorian McKelvy, looks very good at first.
But it has a lot of problems that the company tries to hide from buyers who don’t know about them. I’ve pointed out these things in this review so you can make a better choice:
The first fight was in 2002 when the client made several claims about the advice to buy an annuity and the fact that Dorian was named as the annuity’s beneficiary.
In 2016, there was a second fight. In this case, the client said, among other things, that purchases made in the client’s accounts from 2010 to 2015 were not good choices.
Damages of $83,917 were asked for by the client, but their claim was turned down.
Maybe the fact that Dorian has gotten into so many fights is that his terms and conditions aren’t very clear. I’ll tell you about a few of them below:
Charging Performance-based Fees
Working with the McKelvy Group Morgan Stanley is also very bad because it charges fees based on how well it does. When your advisor gets paid based on how well he does, he only gets paid if he does better than a certain standard.
On paper, it looks like a great way to set prices. But in fact, it makes the advisor more likely to go with high-risk strategies, even if they aren’t right for the client.
When the market is going down, high-risk tactics can cause you to lose a lot of money. Because of this, people in the banking business look down on them a lot.
Also, if you lose money on an investment, you can’t blame your adviser. At best, your claim would be rejected because when you start working with the advisor, you agree to all the risks.
Selling Proprietary and Affiliated Products
The McKelvy Group is part of Morgan Stanley, which is one of the biggest banks and sources of financial services in the US. Morgan Stanley owns a lot of investments itself and has many partners who also own investments.
The McKelvy Group would make more money if they sold these stocks because they would get high commissions. When an advisory firm sells its own investments, it limits the kinds of investments it can offer to its clients.
Also, it can cloud their judgment and make them offer securities that aren’t right or aren’t very good.
UBS is being sued by a group of people because its advisors offered one of its own products without checking to see if it was right.
Putting Fees of 12b-1
The McKelvy Group has stocks with fees that start with “12b-1.” This is a fee for advertising that goes to the broker, who is your guide.
The 12b-1 fee doesn’t make the investment worth more. It only makes the security cost more and makes it look like a better investment than the ones that don’t charge this fee.
The SEC did a study that compared the results of mutual funds with and without 12b-1 fees. There was no difference between the two in how much money they made. They also came to the conclusion that stocks with 12b-1 fees were worse because they cost more.
Together, this fee and your advisor’s ideas, which are based on how much commission he or she will make, can do a lot of damage to your financial security.
Think about Freestone Capital Management. Many of its former workers talk about how bad the company is, let alone how bad it is for its clients. They also charge 12b-1 fees and fees based on how well they do.
Conclusion
The Group McKelvy The executive director of Morgan Stanley has had many disagreements with his clients. Keep in mind that many clients who have a dispute don’t even make a claim. They talk about it with their counselor, and then they split up.
Not many clients actually make a claim against their advisor. So, the fact that Dorian McKelvy’s FINRA BrokerCheck page has a lot of disclosures doesn’t make him look good.
Find a different financial advisory firm, ideally one that is independent.
