As an experienced financial analyst and writer, I’m deeply immersed in the nuances of the investment world. I’ve seen firsthand that most people put a great deal of trust in their financial advisors, anticipating guidance that aligns with their best interests. However, the situation involving James Monken, associated with Morgan Stanley in Clayton, MO, serves as a crucial reminder: not all advisors uphold this trust.
My career kicked off in finance over a decade ago, and it’s been quite the journey. I’ve seen professionals like James Monken, who carry a significant amount of experience, climb the ranks over time. Before his current position at Morgan Stanley, Monken worked at Morgan Keegan & Company, Inc.—certainly not an amateur’s path.
Despite this impressive history, Monken’s record isn’t without its blemishes. Evidence of this can be seen in the recent allegations against him made public by the Financial Industry Regulatory Authority (FINRA). A client claimed that the trading strategy Monken used between 2020 and 2022 was unsuitable. It’s a grave charge when you consider that advisors, both legally and ethically, must prioritize their clients’ interests over their own or the firm’s.
In July 2023, another set of allegations emerged. Monken was accused of misrepresenting investments in a managed account during the previous two years. These unresolved customer disputes shadow his standing and reflect poorly on Morgan Stanley as well.
If you’re curious about the details of an advisor’s professional standing, take a look at the FINRA BrokerCheck website. It’s a helpful resource where you can find a financial advisor’s record, including any legal entanglements or client complaints, and even an advisor’s [FINRA CRM number](https://brokercheck.finra.org/).
Investors should know that if their financial advisor fails them, there’s a pathway to seek recovery for their losses. The basics around this are pretty straightforward. Advisors are required to only recommend investments or strategies that are appropriate for someone—and to understand who that someone might be, due diligence is a must.
Beyond this, advisors must adhere to the concept of quantitative suitability. This means that any series of transactions they suggest should be reasonable as a whole, not just individually—at least for someone. This looks at the entirety of a client’s financial picture and their ability to take on risk.
It goes even further with customer-specific suitability, where advisors need to match their advice to a client’s unique situation, factoring in age, tax circumstances, investment timeframes, liquidity necessities, and how much risk they’re comfortable with.
However, the reality is that the finance industry isn’t immune to errors. The pending disputes against Monken underscore the importance of remaining vigilant as an investor. It’s unsettling when trust is breached, but these scenarios can also drive the push for more robust safeguards within the sector. As we await the outcomes, I’m reminded of a saying by Warren Buffett: “It takes 20 years to build a reputation and five minutes to ruin it.”
In my view, investors should always have transparency, trust, and vigilance in their arsenal. Financial advisors wield great influence over our assets and ultimately our financial futures. It’s why I’m committed to demystifying the complexities of finance and empowering individuals with the knowledge they need to confidently engage with the industry.
A surprising financial fact is that, according to the Securities and Exchange Commission, bad financial advisors cost American investors between $5 billion and $17 billion a year. This staggering number demonstrates the importance of thoroughly researching and regularly reviewing the performance of financial advisors.
In wrapping up, let’s acknowledge that while investment advisors like James Monken are essential in helping us navigate the financial waters, we must do our due diligence. Being informed, asking the right questions, and periodically checking in are key to ensuring that our financial journey is steered correctly. While we place our future in their hands, our own oversight is the best safeguard against potential losses. Remember, in finance, knowledge is indeed power.
