If you live in Phoenix, Arizona, and you need a financial advisor, you might run into Scot Benefiel Merrill Lynch. He is a certified CPFA financial expert who says he makes it easy for his clients to reach their financial goals.
Before you hire a financial adviser, it’s a good idea to look at their terms and conditions to see if there are any shady parts. So, you’ll be able to make an informed decision about this:
Scot Benefiel is from Merrill Lynch.
Scot Benefiel is a wealth management manager for Merrill Lynch. He works out of Phoenix, Arizona. His office is at 14636 N Scottsdale Rd, Scottsdale, AZ 85254, US. During the week, it is open from 7:30 AM to 3:30 PM.
Scot’s office can be reached at 480-624-0437.
Scot says that he tries to learn what his customers want and need. But what he said tells a whole different story.
Scot is a senior vice president and senior financial planner at Merrill Lynch. Here are the most important things that Scot revealed:
Disclosures from Scot Benefiel and Merrill Lynch Raise Red Flags
Dispute with Client Over $270,000
The TheFINRA BrokerCheck database checks show that Scot Benefiel has had two disputes with his clients in the past. Before working with a financial advisor, it’s best to look them up in this database. It tells you about their professional background, where they’ve worked, and any problems they’ve had with clients.
Most profiles of skilled advisors don’t have any disagreements with them. The fact that Scot has 2 is a very bad sign.
The first disagreement happened in 2003 when the client said there had been a break of fiduciary duty, misrepresentation, and leaving out important facts. Scot and Merrill Lynch agreed to settle this case for $275,000, saying that it would have cost more to go to court.
This year, he had a second disagreement, and it was turned down. The client said that when Scot bought stocks, he didn’t have his best interests in mind. Scot rejected these claims and said that the client is still working with him as a professional.
Both of these problems have to do with a lack of care for people. As you read the following troubling parts of his disclosures, you’ll understand why Scot finds it easy to ignore your needs:
Fees Based on Performance
Scot Benefiel Merrill Lynch gets paid based on how well its clients do. This means that he gets paid when he beats a certain index or standard. Using this fee system might look good on paper, but it’s terrible in real life.
If the fee is based on performance, the advisor has to use high-risk tactics to beat the benchmark. Strategies with a lot of risks may pay off more, but only “if” they work.
These kinds of methods can also cause you to lose a lot of money or get a low return. Also, you can’t blame your counselor for these losses because you signed a waiver when you first started working with them.
In the 1940s, Congress banned the performance-based fee system because it was so dangerous. In 1985, the SEC said it was okay, but only for certain clients.
By itself, this is a big red flag about Scot’s claims.
12b-1 Fees Issue
Scot can sell investment goods with 12b-1 fees because he works for Merrill Lynch. This is a promotion fee, and the advisor gets to keep it.
The 12b-1 fee adds to the cost of your investment without giving you anything in return. This fee could add up and hurt your wealth in the long run. So, in the long run, it’s not a good idea.
Selling Proprietary Products
Scot Benefiel says in his disclosures that he can earn commissions from the sale of his own investment products and investment products from companies he is involved with. Proprietary products can make it hard for an advisor to make good decisions because they pay much higher fees than other investments.
With these financial products, an advisor can only suggest certain securities to their clients. Because of this, it can make you miss out on a lot of great investments and returns just because they weren’t on your advisor’s product list.
Earnings based on commission
Scot Benefiel Merrill Lynch can also make money from commissions from sources other than selling its goods. Getting paid through fees can cause a lot of problems.
It gives the financial advisor a reason to put his own needs ahead of those of his client.
Cross-selling commission-based products, selling insurance that isn’t needed, making recommendations that aren’t the best, and giving bad financial advice are all problems that can come from commission-based earnings.
Because of these problems, it’s hard to trust experts who get paid through commissions. If you are a client of Scot Benefiel, you should look at your investments and see which ones give his company commissions.
Summary
Scot Benefiel does not think that Merrill Lynch is a great financial advisor. He may say that he cares about his clients and what’s best for them, but his reports show that he doesn’t. Also, he has been in big fights with his clients before.
All of this shows that you should stay away from him and find a different financial expert who cares about your needs.
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