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July 06, 2015 at 11:18 AM
Three titans of the broker world will pay a combined $30 million in restitution to more than 50,000 retirement accounts and charitable organizations after the firms failed to waive fees on mutual funds.
The Financial Industry Regulatory Authority ordered the advisor channels of Wells Fargo, Raymond James, and LPL Financial to make retirement investors whole after accounts were charged fees on Class A shares of mutual funds when investors qualified to have those fees waived.
In a statement, FINRA said each firm detected and self-reported the errors, which is why the regulator did not levy fines. Wells Fargo will return $15 million in fees and interest, and Raymond James and LPL will return $8.7 million and $6.3 million respectively.
Fees on retail shares of mutual funds are often waived when offered to participants in workplace savings plans to maintain compliance with the Employee Retirement Income Security Act.
The infractions occurred beginning in July 2009 after the firms “unreasonably relied on financial advisors to waive charges,” according to a statement from FINRA. The statement did not say if the failure to waive the charges was intentional, but only that the firms failed to provide “critical information and training” to their sales forces.
The three firms neither admitted nor denied the charges in consenting to the FINRA action.
