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January 21, 2021

Morgan Stanley Fires Another Broker Over Inherited Account Issues

by Mason Braswell
|
News
|
Ameriprise, Morgan Stanley
|
Ameriprise, FAP, Fired Broker, Inherited Accounts, Texas
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Comments (7)
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Financial advisor fired for Black Lives Matter confrontation

Morgan Stanley Wealth Management’s probe of alleged ‘inherited account’ abusers that led it to purge at least ten advisors in mid-November has claimed another inheritor.

Michael Witt, who had spent all of his 20-year brokerage career with Morgan Stanley, was discharged on January 7 over allegations that he “submitted transactions under production numbers that were inconsistent with agreement with other representatives, resulting in a shortfall of revenue credited to other representatives,” according to his BrokerCheck record.

The allegations involve Morgan Stanley’s Former Advisor Program (FAP), according to sources. It pays advisors who “sell” their books of client accounts to a colleague a percentage of payout on the accounts for up to five years after they retire. Morgan Stanley and other large firms have been promoting such “sunsetting” programs in an attempt to keep experienced advisors from leaving with their clients to other firms.

Witt, who was based in Dallas, Texas, joined Ameriprise Financial Services’ employee channel in nearby Plano last week. Reached there, he declined to comment, citing Ameriprise policy.

An Ameriprise spokeswoman confirmed Witt’s hire, saying he had been managing about $150 million in client assets, but declined to comment on Morgan Stanley’s U5 notice summarized on his BrokerCheck record.

In November, Morgan Stanley dismissed brokers in Florida, California and other states following internal investigations that insiders said were prompted by complaints from retirees in the FAP.

Morgan Stanley tweaked the program two years ago to make it more palatable to inheriting advisors by subsidizing some of the payout split they give up. It also promotes the program by pre-enrolling top-tier advisors well ahead of their retirements with a formula that gives them up to 80% of the payout when they first retire.

Witt spent much of his Morgan Stanley career in sales management posts, but shifted to becoming a full-time advisor about two years ago following a reorganization of Dallas management, said a former advisor at the complex.

A Morgan Stanley spokeswoman did not return a request for comment on Witt’s departure and career history, and on the status of its review of the FAP.

In their defense, some brokers accused of withholding credit to retired advisors by solely using their own production numbers said they had been instructed to game the system by their direct managers or simply made filing mistakes, according to lawyers representing them.

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Comments (7)
  • on Jan 21 2021, Dean Witter says:

    Seems like a great firm

    > Reply to Dean Witter
    • on Jan 22 2021, Glad-I'm-Gone says:

      Well, if you were the adviser who left (sold your book), how would you feel? Those advisers who CHEAT on this, probably cheat on other issues. They seem to put “yield to broker” above all other things.

      > Reply to Glad-I'm-Gone
  • on Jan 22 2021, Skip Blutarski says:

    The fact these accounts are not hard coded by the firm is telling. They take out two brokers and lessen their overall costs. Repeated errors in the implementation of these revenue share agreements allow the firms to feign outrage even though they do zero to eliminate the possibility in the first place. Most of the advisers participating in these agreements are small, low producers whom management is about to show the door.

    > Reply to Skip Blutarski
  • on Jan 23 2021, Roscoe says:

    Funny how they never fire the Complex managers who allow these things to happen. Lack of real managers is a problem. MS is loaded with “yes” men and back slappers. When something goes wrong the mantra is, “how did that happen!” A 12 year computer geek could write a program that could stop this from happening.

    > Reply to Roscoe
  • on Jan 23 2021, Jimmy Crack Corn says:

    I knew Witt in a past life at MS. He was in management then and like the majority of management at MS, he was worthless. But look at that complex now. Ron Thacker? Gone. Ben Fujihara? Fired. Michael Witt? Fired. Only Patrick Manion remains, but I’m sure he will get fired at some point as well.

    > Reply to Jimmy Crack Corn
    • on Mar 26 2021, Catherine V Guerrero says:

      They don’t call me miss Jones for nothing

      > Reply to Catherine V Guerrero
      • on Mar 26 2021, Catherine V Guerrero says:

        Can u define your. Report I felling robbed

        > Reply to Catherine V Guerrero

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