In a sweeping and stunning development last week, Morgan Stanley fired several high profile advisors in San Francisco, Northern California, Boston, and Texas. The dismissals, according to sources, were swift and without notice.
Why were the advisors terminated and what led to the scale of the dismissals? According to several people, we spoke to the actions that were taken based on retirement agreements with advisors that had left the business altogether and may or may not have been getting the full payouts by the teams they left behind.
Morgan Stanley’s auditors have been described as finding ‘discrepancies’ in the product and payout data associated with the teams that were dismissed. To put it more plainly, the mass firings were alleged to be tied to teams not passing on the proper percentage of revenue on retiring advisors’ assets and production.
Morgan Stanley stopped the secret investigation (nobody knew an audit was even underway) once they found irregularities and immediately fired anyone they believed deserved it. The firm didn’t discuss the allegations or give any advisor an opportunity to prove the audit information incorrect or nuanced in some way.
In other words, the advisors were fired with absolutely zero due processes. Blindsided. And as we hear it, a class action lawsuit is being considered amongst those affected. **Also as we hear it, there may be as many as 100 advisors terminated nationwide because of this audit.
