Morgan Stanley Said to Fire R.I. Broker over Inherited Accounts as Others Find New Homes
Morgan Stanley has terminated another broker over inherited account coding issues, a source said, even as at least three others fired in recent months have found new homes.
In a reflection that the firm’s sweep has reached the higher end of its sales force, Martin ranked sixth on Forbes’ 2021 “Best-in-State” wealth advisors list, which said he managed $652 million in client assets. He had spent his entire career with Morgan Stanley and its Smith Barney predecessor, which he joined in 1999, according to his BrokerCheck report.
Martin did not respond to a request for comment sent through social media. As of Tuesday, his Morgan Stanley website was rerouting to the firm’s financial advisor search page and he was not listed in the Providence branch’s directory.
A Morgan Stanley spokeswoman declined to comment on the departure or on whether the firm has discharged others recently over issues related to the Former Advisor Program (FAP).
Meanwhile, one of the earlier terminations, Thomas A. Foster, a former Terre Haute branch manager who had been discharged from the wirehouse on April 16, joined Advisor Group-owned independent broker-dealer Woodbury Financial Services in Carmel, Indiana on Friday, according to his BrokerCheck.
The 24-year industry veteran, who spent most of his career with Morgan Stanley and its Smith Barney predecessor Citigroup Global Markets, had been terminated over allegations that he “submitted transactions under production numbers that were inconsistent with agreement with another representative resulting in a shortfall of revenue credited to the other representative,” according to his BrokerCheck. The ‘disclosure’ also noted that there was no client impact.
Foster did not return a call for comment at his new office with Woodbury-associated firm Financial Partners Group. A source familiar had said the allegations may have dated back to trading commissions nearly eight years ago.
Separately, Andrew Michienzi and Mikayla Michienzi, a father-daughter duo in Wellesley, Massachusetts who had been discharged from the wirehouse in late April over similar accusations, were taken in by Oppenheimer & Co. in Boston on May 7, according to their BrokerChecks. Sources previously said the duo had generated around $2 million in annual revenue.
Andrew, who had spent all of his 34-year career with Morgan Stanley and predecessor firms, was terminated April 26 with the same disclosure language as Foster. Mikayla, who registered with the firm in 2018, had no ‘disclosures’ listed on her record as of Tuesday.
The duo did not respond to a request for comment sent through social media.
In the case of the Michienzis, the errors in question had amounted to $22,000 in commissions over a “few” trades that a source close to the team said were accidentally miscoded.
They were among the latest targets of Morgan Stanley’s review of alleged inherited account abusers in the FAP. The brokerage purged at least ten advisors in mid-November and another group in January. Several have found new homes at regional broker-dealers.
The initial investigation, previously acknowledged by Morgan Stanley, had been prompted by complaints about underpayments from at least one retired broker who entered the FAP, a so-called ‘sunsetting’ plan that the brokerage and other large firms have touted to keep brokers nearing retirement from joining other firms and taking clients with them.
The client-retention programs are supposed to allow near-retirement brokers to receive a split of fees and commissions paid by former clients for several years if the brokers let their practices lapse after they leave.
In their defense, some brokers accused of withholding credit to retired advisors by solely using their own production numbers said they were instructed to game the system by their direct managers or simply made clerical mistakes, according to lawyers representing them in U5 negotiations.