The Huntsville office of Hightower Advisors is called Twickenham Advisors. It is run by WF Sanders Jr. and John Wesley Clayton (Wes Clayton).
This fiduciary company has flaws, just like every other business. So, before you start dealing with them and putting your future finances at risk, it would be best to know what their main problems are.
The following points will give you an idea of the most important warning signs about this company. It would help you make better choices about this:
About Twickenham Advisors
Twickenham Advisors is a company in Huntsville, Alabama that helps people with their money. They are located at 100 Church St SW STE 625, Huntsville, AL 35801, with a telephone number of 256-213-1150.
They have a connection to Hightower Advisors. The company works with people, families, groups, and businesses. WF Sanders Jr., John Wesley Clayton, and Henry Moss Crosby Jr. started this business.
The leaders of this company have won several prestigious honors and awards. For example, Henry Moss Crosby, Jr., who started this company, was named the best wealth advisor in Alabama by Forbes in 2021.
But financial consulting companies often use these awards to keep investors from focusing on the real issues.
This advisory company says that they can help with money and investments as real fiduciaries. But there are several big red flags about this company.
Wes Clayton is being sued for more than $138,000.
Wes Clayton helped start Twickenham Advisors, where he is a partner and the managing director. As the head of the company, he has a strong say in how things work and what services a client gets.
On Wes Clayton’s FINRA BrokerCheck page, you can see that he has been in a disagreement. In 2004, a client who was unhappy with the way their money was “invested” between December 31, 2000, and May 1, 2004, filed a lawsuit.
Even though the claim was turned down for unknown reasons, the amount of money asked for was $138,070.00.
It’s important to know what disagreements your trustee has had in the past because it shows how trustworthy they are. In the case of Wes Clayton, the fact that he is in a fight over more than $100,000 is a big red flag.
But if you dig deeper and look at Clayton’s firm’s fees and policies, you’ll find that there are a lot more problems with it.
Here are a few red flags in this fiduciary’s reports. They will help you figure out if you can put your money in their hands or not.
Advisors for problems in Twickenham
Not only does this fiduciary have a complicated past, but its reports also show that it has several ethical problems. Before you hire them as your guide, you must make sure they know about these things. If you know about their conflicts of interest, you’ll be able to tell if you can trust the purchases they suggest or not.
There are also a lot of them:
They sell and buy stocks.
The fact that Twickenham Advisors is a broker-dealer is the first conflict of interest that they say they have. This can cause a lot of problems because it means they make money from some investments.
The job of a financial advisor is to help you choose options that will help you reach your financial goals. But if the advisor has a reason to push certain choices, it can make them less objective.
Your financial advisor can easily switch from putting your needs first to putting their own needs first. That’s never good for the client, which in this case is you.
If you are already a client of Wes Clayton or his company, you should look over your investments and ask how much commission they make.
Charge 12b-1 fees for mutual funds
Wes Clayton’s company also offers mutual funds with 12b-1 fees, which is another important part of his services. It’s a marketing fee that generally goes to the advisor.
The fee not only adds to the total cost of your investment, but it also doesn’t give you anything in return for the extra cost. SEC has looked into the difference between the results of mutual funds that charge 12b-1 fees and those that don’t. The study showed that the returns of the two mutual funds were the same.
In fact, because of the extra fee, mutual funds with 12b-1 fees made less money.
This is a big problem with using Twickenham Advisors. Even if they are the Huntsville branch of Hightower Advisors, it’s a bad deal to pay high fees and get nothing back.
They accept performance-based fees.
There are different kinds of fees that investment managers charge, but performance-based fees are the ones that everyone knows about. When a financial advisor charges a fee based on how well he does, he only gets paid if he does better than a standard, such as an index.
It looks like a good way to get paid, but it’s very risky. With performance-based fees, your advisor has an incentive to go after high-risk tactics. Because these tactics involve a lot of risk, it’s easy to lose most or all of your money.
A study found that mutual funds with fee structures based on success took too many risks and didn’t do well. When the market is going down, these kinds of moves are especially risky.
Also, the SEC let advisors use this fee structure in 1985. Before that, the Investment Advisers Act, which Congress passed in 1940, made it illegal for RIAs to use this fee structure.
This advisory company gets paid based on how well you do, so they have a reason to put you in more danger. If you want a strategy with low or medium risk, Twickenham Advisors might not be right for you.
Perform Side-by-Side Management
Side-by-side managing is what Wes Clayton and his company do. This means he might favor bigger funds, which could hurt smaller clients’ trade executions and costs.
Side-by-side management can hurt the quality of the service your counselor gives you. It’s pretty normal for a fiduciary to give bad advice to its smaller retail accounts to save time and effort for the larger funds.
They’re happy with soft-dollar benefits.
The fact that this advisory firm takes soft-dollar benefits is also a problem. These are well-known in the financial world because they make it easy for an advisor to take advantage of a client.
When advisors take soft-dollar benefits, they tend to push trades through brokers who are better for their own business than for their clients. Like the other conflicts of interest, this one makes it hard to trust the advisor’s advice because it is biased.
Suggested Trade Securities
This means that Wes Clayton and his company buy and sell the stocks they advise their clients to buy. It can lead to a lot of moral problems because the advisor can use the money of their clients to get better results for themselves.
Worse is that most people don’t even know this is happening.
One example is called “front running.” In this case, the advisor trades certain stocks and then suggests them to the investor so that he or she can get a better return.
Trading in suggested securities can have a big effect on what an advisor suggests. He might even put himself ahead of the client’s needs and focus on making more money for himself.
Wes Clayton and Twickenham Advisors should be avoided.
After reading about the firm’s different conflicts of interest, it’s clear that you can’t trust Twickenham Advisors. Even though they have won a lot of awards, that doesn’t change the fact that their founder was in a disagreement worth more than $100,000.
It also doesn’t change the fact that this company has a lot of ethical problems. For instance, can you trust a financial expert who earns money by putting you in needless danger?
Because of these things, it would be best not to work with this company.
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