Aug. 30, 2006 - Hurricane Ameriprise

Forget about Hurricane Katrina.  Hurricane Ameriprise strikes again in Baton Rouge, LA!  This time it's in the form of David McFadden, a broker with Securities America which is a subsidiary of Ameriprise.

The bad news just does not end for Ameriprise.

As usual, Hurricane Ameriprise wrecked many client accounts but this time also suffered a $22 million aribitration award for leaving McFadden "virtually unsupervised" according to the NASD.

Here's the damage report from McFadden's activities courtesy of yesterday's Wall Street Journal (subscription only):

• Lying to potential clients about his long-expired CPA credentials.
• Whittling Bradley Simon's $700,000 retirement account down to $267,000.
• Wiping out 73-year-old Pat Salatich's savings of $565,383 and leaving her with $73,000.
• Putting clients primarily in high fee variable annuities and "class b" shares of mutual funds.  (That's a shocker!)
• Attracting clients through "seminars" paid for by the firms whose products he sold.

With friends like McFadden, who needs enemies?!

All of this is brought to you by an industry that believes it can structure commissions and fees to reward brokers for screwing clients but fully expects them to defy natural human tendancies and take the high road.  This is as much a failing of the legal and regulatory environment as it is Ameriprise.  The whole system needs to change.

Ironically, Ameriprise has been running ads touting what they call "The Dream Book" to help all of us plan for retirement.  Maybe Ameriprise should go back to the basics and get their own house in order first. 

They've already turned enough dreams into nightmares.