Tuesday, March 25, 2008

The Ameriprise Gravy Train

I am sure most Ameriprise advisors are professional, knowledgeable and conscientious. I am also sure Ameriprise has at least their share of individuals who run their practices for their own benefit without regard for the long-term well-being of their clients.

But one has to wonder why this Minneapolis-based financial planning firm makes their way into the news fairly regularly and usually for the wrong reasons.

Is it a top-level management issue? A cultural issue?

Or is it a shark in the water smelling blood?

For nearly a decade, Jon E. Drucker has been a thorn in the side of Ameriprise Financial Inc.

The 53-year-old lawyer, who works out of a garage, converted into an office, at his home in Los Angeles, has made a decent living representing advisers and individual investors in lawsuits against Ameriprise, formerly known as American Express Financial Advisors Inc.

What's more, Mr. Drucker, who recently negotiated a $100 million settlement with Ameriprise, firmly believes that his biggest case against the Minneapolis-based firm is yet to come.

In all, Mr. Drucker has represented 10 named plaintiffs in five class actions against American Express and Ameriprise. All five of the suits were settled out of court.

Predictably, Ameriprise takes a dimmer view of Mr. Drucker.

"A lawyer making a career filing frivolous class-action lawsuits doesn't merit a comment from us," said Ben Pratt, a spokesman for the Minneapolis-based company.

In his no-holds-barred style, Mr. Drucker recounts how he once tried, unsuccessfully, to get then-New York Attorney General Eliot L. Spitzer to look into American Ex-press' dealings. Last Monday, amid revelations of his involvement with a prostitution ring, Mr. Spitzer stepped down as the state's governor.

"If he'd paid more attention to what American Express was doing to its clients and not doing the same thing with the hooker, he might still be governor of New York," he said.


Bike Bubba said...

If it's just a shark in the water, why are they settling out of court? Even if the cases are indeed totally frivolous, settling like this may indicate that something is very wrong there--starting with a refusal to kill the shark patrolling the beach.

(not literally killing the lawyer, of course, but of using the courts to smush his cases and end the bleeding)

Jon said...

As that shark, let me tell you that I can't smell blood at Ameriprise because it is a cesspool of investment advice. You have it backwards: The good advisors who are looking out for their clients' interests above their own -- as their fiduciary duty demands -- spoil things for the 99% of the other advisors who are taught by company higher-ups to sell often-inappropriate, overpriced, underperforming proprietary products to their unsuspecting clientele.

I also don't chase after Ameriprise clients; they come to me. In fact, I get several emails every week; most complaints are too small for any lawyer to litigate, so I help these people sue Ameriprise in small claims court, providing them with materials and direction.

This is one rotten company.

Anonymous said...

Hey, I worked there and I could not leave fast enough. They are in the news for problems every couple of months and it is a culture of anything goes and make money at all costs. It is sickening. It will all come home to roost.