Ameriprise was sued. Are you reconsidering your investments with them?

Question

Ameriprise is settling a class action lawsuit for giving bad investment advice to their clients. According to the lawsuit, they systematically steer clients into investments that generate the most fees for them, rather than what's best for the clients. If you have money with Ameriprise, are you considering moving it elsewhere?

ehawk, I am not misinformed. I never said it was about the advisors' commissions; it's about Ameriprise making money on their own investments by recommending them to their clients. And in fact, Ameriprise advisors are evaluated on what percent of the investments they sell are the "preferred" Ameriprise investments versus outside investments.

Finally, many financial advisors charge a flat or hourly fee for financial advice, and receive no commissions. That's the only way to get impartial advice; anyone who earns commissions and gives financial advice has a conflict of interest.

I know Ameriprise advisors are evaluated that way because one of them showed me his performance evaluation.

Answer 1

I would get out of Ameriprise no matter what. Ameriprise is the worst "financial advisory" firm. I put that in quotes because they aren't a true financial advisory firm. Go to Edward Jones, Morgan Stanley, JPMorgan, or an independent fee-only (meaning they don't make money off commissions of the products they sell you). Financial advisors are supposed to do a better job to find what best suits your needs rather than theirs.

Answer 2

Wow... you are misinformed. First of all every major Financial Services firm was sued for what is called a "preferred list". Second it had nothing to do with the commission to the advisor, it had to do with the brokerage fees that a company pays to the mutual fund firm. So the advisor is not impacted at all, the lawsuit is about the financial services companies have not disclosed this difference in fees between preferred providers and other mutual fund companies to clients in a prospectus.

Also, no advisor is ever pushed to sell a specific companies products (even Riversourse - Ameriprise fund company) they decide the investments they want to recomend on their own. If they were pushed or pressured that would open the company to litigation like what happend to AMEX, Merrill, Morgan, Schwab, Bear Sterns, and Smith Barney in the late 90's.

Lastly, do honestly think that any financial planner or advisor does not receive a commission for selling a fund or product? No matter where you go to buy investments, insurance, annuities, jewelry, cars, or furniture you will be paying the "sales person" a commission. That is how they make money, they are sales people who offer you products to create solutions for your concers/goals.

Answer 3

Every broker-dealer has been sued for something. You name it Merrill, Smith Barner, AG Edwards, whatever. It's not necessarily the company you need to worry about (although I hate merrill), but the individual advisor. Make sure that you can trust your advisor.

Answer 4

And they said oops. Any brokers that are told to make more commisions might do that

Answer 5

everybody gets sued, particularly brokers. they are large firm, probably ok for fairly novice investor, but you could do better, you could do worse