September 23, 2015
As reported in ‘Troubling' New Arbitration System Brewing at Morgan Stanley (Wealthmanagement.com by Megan Leonhardt, September 22, 2015), Morgan Stanley is rolling out a so-called internal arbitration forum under the clunky name of "Convenient Access to Resolutions for Employees" or CARE. No . . . I ain't a fan of too-clever attempts to shoehorn some dubious venture into a cute acronym. Worse, I generally detest so-called negative consent programs where everyone is "in" if you don't opt out. Gotta give Morgan Stanley credit, they managed to catch my attention with an awkard acronym and a negative consent enrollment plan.
I urge all serious industry participants to read Megan Leonhardt's excellent article about this troubling trend whereby financial services firms may start to try and corral their investment advisors into yet another intra-industry, mandatory arbitration program. Keep in mind that none of the men and women who will be diverted into this arbitration program were asked by the employer firm or any regulator as to their preferences and concerns. This is fiat operating under the guise of paternalism. That's the rock. That's the hard place. We think it's in your best interest, however, to get in between.
What does that FINRA rule say? Oh yeah: high standards of commercial honor and just and equitable principles of trade. Sure, that's what this internal arbitration thing is: honorable, just, and equitable . . . but for, you know, that it's pretty much created and implemented by management and negatively consented to by thousands of men and women who constitute the firm's labor force. Of course, all those employees can opt out. No problem. Just fill out the form, print your name, sign it, and we will strike you off the new program.
Oh, and don't worry, no one is taking names and keeping records. Course not. Why would you even worry about that? You know we're only looking out for your best interests. That's why we haven't put the whole new program to a vote among all the folks who will be enrolled in this thing that we designed and are arbitrarily implementing. Just trying to do the honorable, just, and equitable thing here for you.