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Big Brokerages to Fork Out for Mutual-Fund Overcharges

July 7, 2015

Finra has ordered Wells Fargo, Raymond James Financial and LPL Financial to pay back more than $30 million to retirement and charity accounts in mutual-fund waivers, The Wall Street Journal writes. The firms neither admit nor deny wrongdoing in the matters.

The brokerages improperly charged mutual-fund sales fees to certain retirement and charity accounts, for which fund companies provide waivers, the Journal reports. Wells Fargo will repay $15 million, Raymond James $8.7 million and LPL $6.3 million. Because the companies caught the lapses themselves and reported them to Finra, they will pay no fines, according to a Finra press release. But Finra also said that the firms failed to supervise and train their financial advisors to handle the waivers.

A Raymond James spokesman tells the Journal the company has initiated refunds, stressing that it self-reported the finding. An LPL spokeswoman tells the paper that her firm has begun paying back investors as well as making process changes to prevent the issue from arising again. Wells Fargo declined to speak to the newspaper.

Finra had previously come after Merrill Lynch for failing to pass on mutual-fund waivers. In June last year, it ordered the brokerage to pay back $24.4 million and cough up an $8 million fine.

By Alex Padalka
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