Earlier this month, Morgan Stanley sent out a notice to employees notifying them that its internal voluntary dispute resolution forum, or CARE (Convenient Access to Resolutions for Employees) would be the required format going forward. That is, unless advisers opt out of it. To opt out, employees will need to complete paperwork by October 2nd. For the employees who do not, they will be consenting to the program, meaning they will be waiving their right to sue Morgan Stanley individually, or in a class action lawsuit. Many are suspicious of the program, citing possible hidden agendas that can go along with a negative opt out. A memo sent to Morgan Stanley employees stated that advisers opting out of the CARE program “will not adversely affect their employment status with the firm, but it is likely that opting out could affect advisors’ futures with respect to issues like promotions and future pay.
Advisors are obligated to arbitrate customer disputes and firm issues through the Financial Industry Regulatory Authority (FINRA), but the Morgan Stanley program provides alternate and additional arbitration to handle employment issues such as wrongful termination. Most Morgan Stanley employees are part of the CARE program, as it is not new. It is just more private. It could deter advisers and firms from using FINRA, and is possible other firms may move in the same direction, implementing two-tiered arbitration systems.
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