The National Association of Securities Dealers has imposed a $500,000 fine on Ameriprise Financial Services Inc. in connection with what the NASD says were problems with supervision of advisors who were selling 529 college savings plans.[@@]
Ameriprise, Minneapolis, is neither admitting nor denying the allegations, but it has agreed to pay about $750,000 to compensate holders of about 500 accounts affected by the alleged supervision problems.
“We are pleased to have resolved this matter,” says Ameriprise spokesman David Kanihan. Kanihan declined to talk further about the enforcement action.
The NASD, Washington, says the Ameriprise fine is the first fruit of a 529 plan sales “fact-finding sweep” that started in 2003.
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Sales of 529 plans are regulated by the Municipal Securities Rulemaking Board, but the NASD enforces the board’s rules.
The NASD, which appears to be gearing up to impose fines on other 529 plan sellers, says Ameriprise did a poor job of making sure that consumers understood the potential state income tax benefits of offering 529 plans in their home states.