The 650 Group Morgan Stanley is a Con Artist Group

Group of 650 Morgan Stanley is a California-based financial advisory firm. This company lures in naive customers with exaggerated claims about its knowledge and capabilities before locking them into contracts rife with hidden costs and other disadvantages.

I’ve pointed out some of the inconsistencies in their services so you can make an educated choice regarding their company:

Who Manages Morgan Stanley’s 650 Group?

Group of 650 The headquarters of Morgan Stanley can be found in nearby Menlo Park. This company has four MDs:

  • R. P., Richard
  • Ashely Steven
  • L Timothy Emanuels
  • W. L. Ross III, William

These men have collectively worked in the field for countless years. They are one of the largest and most successful asset management teams in the world, and they have an office in the heart of San Francisco.

Don’t be fooled by their egotistical statements and praise; their policies are bad for everyone but themselves. When working with such advisors, many investors don’t read the fine print.

Several questionable clauses in the 650 Team’s terms and conditions place you in an awkward position. From what they’ve made public, it seems like they prefer to put the company’s bottom line ahead of yours and your financial stability.

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Some of the various warning signs that can be seen in the 650 Team Morgan Stanley are listed below.

Problems with the 650 Team Morgan Stanley’s Small Print

Lack of Trust in the Leadership

The FINRA BrokerCheck profile of managing director Richard Petit is the first and most obvious red flag in the 650 teams at Morgan Stanley. There is a database called FINRA BrokerCheck where you may learn everything you need to know about your financial advisor.

This contains details about any customer issues they may have had, as well as their professional background, state licenses, tests taken, and other relevant information.

According to Richard Petit’s biography, he had one consumer complaint in 1993. In this case, the client claimed that the financial advisor’s decisions to invest in partnership interests, securities trusts, and an annuity at the start of September 1984 went against her stated goals for the portfolio. Therefore, they were a breach of fiduciary duty and a violation of the NASD’s rules of fair practice and Section 10(B)(5) of the Securities Exchange Act.
The plaintiff initially sought $54,000 in compensation but ultimately settled for $14,999.99. Richard has replied that all of the accounts she mentioned were indeed profitable, dismissing her complaint.

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Keep in mind that complaints against financial advisors are extremely uncommon. They usually strive to work out their differences amicably and avoid legal action. Therefore, the fact that Richard has included details about a legal dispute in his profile speaks volumes about the quality of service he provides.

Even though you’re at a significant disadvantage, it will be incredibly difficult to take Richard to court due to the following provisions in his disclosures:

Creating Unnecessary Danger for Customers

The 650 Team at Morgan Stanley uses the widely reviled practice of charging clients based on their performance. Advisors who charge performance-based fees only get paid if they outperform a client’s designated index or benchmark.

Because of this, they are forced to take calculated risks. Investment portfolios designed to provide long-term safety should avoid such tactics.

The term “high-risk” is appropriately used because these methods provide negative returns almost exclusively. Most of the time, the returns from these techniques are mediocre at best, and the client is powerless to do anything about it because they assumed the risk when they became a client.

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This is why a performance-based pricing structure was forbidden before 1985. This fraudulent banking method has cost many people their life savings.

Avoid working with any financial advisor that bases their compensation on how well they perform.

Investment “selling” as opposed to investment “recommendation”

Another major problem with Richard Petit and his company is that they don’t provide financial advice but rather try to make a profit off of it. The 650-member Team Morgan Stanley works for a financial institution that offers a wide range of its own and branded investment options.

The company can earn substantial fees from the sale of these products. Commission-based, product-selling financial advisors often put their interests ahead of their clients.
Advisors that engage in the sale of proprietary and connected securities have fewer investment options to suggest to their customers. It also makes it hard to put faith in the advisor’s suggestions.

Recently, UBS was hit with several lawsuits because its advisors had been recommending an inappropriate proprietary financial plan to customers. UBS advisors caused hundreds of millions of dollars in losses when they suggested an inappropriate product to their clients.

Implementing a Superfluous Charge

The many fees charged by their advisor are often disregarded by many investors. Some consultants take advantage of this situation by tacking on extra, unneeded fees to the final price.

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Group of 650 Morgan Stanley is also in this game, charging 12b-01 fees for similar investments. The broker-dealer (your advisor) will keep all of this promotional money.

The 12b-1 fee has earned a bad reputation in the financial sector since it allows advisors to profit from their clients while providing them with no tangible value in exchange. The SEC analyzed the performance of investments with and without 12b-1 fees in great detail.

They compared the profits from the two and saw no difference. Investments with 12b-1 fees have a lower return on investment (ROI) due to their much higher fees.

The Final Thoughts on Team Morgan Stanley’s 650 Performance

The 650 team at Morgan Stanley is a particularly greedy business, as seen by its many legal conflicts with clients and its use of questionable terms that put its clients at a disadvantage.

It appears that this company does not value its clientele. Finding a new service provider who doesn’t impose such onerous terms and conditions might be in your best interest.

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