Morgan Stanley, Citigroup Overcharge Clients: Mistakes or Policies?

Last week, the SEC announced that Morgan Stanley agreed to pay $13 million as a penalty for overbilling 149,000 of its clients. They weren’t the only ones to be penalized last week: The Attorney General of the State of New York also announced that Citigroup has agreed to pay $1 million for overcharging clients by $22.5 million.

While a spokesperson for Morgan Stanley explained that these transgressions included “inadvertent billing errors,” Financial Advisor magazine reported that the investigation actually uncovered 36 types of these errors. We find it incredulous that 36 different types of billing errors were just “snafus.” It seems to us that it’s more evidence that large financial institutions care more about making money for themselves than for their own clients.

[Log into your Personal Capital account to see if you’re one of the hundreds of thousands paying surprise fees.]

At Personal Capital, we’ve always served as a fiduciary for our clients’ money. We are required to offer advice in the best interest of our clients. With fierce opposition facing the Department of Labor’s new rules that require everyone – including brokers – to operate as a fiduciary when selling 401k, 403b and Individual Retirement Accounts, we find this distinction more important than ever. We built a true advisory service that combines digital technology with dedicated financial advisors to deliver our mission statement “better financial lives through technology and people.” We can only encourage the rest of the industry to move in this direction soon.

Make an appointment today with Personal Capital advisor, who will always have your best interests in mind.


The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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