Ex-Morgan Stanley advisor claims $1M in disability benefits in suit

A former Morgan Stanley financial advisor is suing the firm over $1 million in disability payments she claims she's owed after having to stop working because of health complaints.

Tara Lusche sued Morgan Stanley last week in federal court in Colorado over allegations that she has been illegally denied payments under the firm's benefits plan for former financial advisors. Lusche, who lives in the Denver suburb of Centennial, Colorado, had to quit working in early 2022 after suffering from fibromyalgia and various health and mental troubles that "impacted her ability to perform her cognitively demanding job duties," according to suit.

Fibromyalgia is a chronic condition associated with pain, fatigue, headaches and other symptoms. Lusche's suit says Lusche acquired a doctor's certification that her ailments had rendered her disabled and she wasn't likely to improve with time.

She was able to obtain both short-term and long-term disability benefits through Morgan Stanley. But when she later inquired about benefits for former advisors — in early 2024 — her claim was denied.

Morgan Stanley's "wrongful conduct and breach of contract has caused injuries and damages to the Plaintiff, including lost benefits, loss of use of benefits, stress, anxiety, emotional upset and the like," according to the suit. "The stress and upset has worsened Plaintiff's medical condition."

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A Morgan Stanley spokesperson declined to comment. Lusche's lawyer did not respond to requests for comment.

Lusche was at Morgan Stanley and its predecessor firm, Smith Barney, for just over 15 years, according to BrokerCheck. She started in the financial services industry in 1999 at Merrill Lynch, joined Capital Brokerage in 2005 before returning to Merrill and eventually moving on to Smith Barney in 2008. Morgan Stanley acquired roughly half of Smith Barney in 2009 and the whole ownership stake four years later.

Besides her claim for over $1 million in disability payments, Lusche is seeking interest and noneconomic damages. Her suit accuses Morgan Stanley of breach of contract and a wrongful denial of benefits.