(Bloomberg) – American International Group Inc. affiliates were fined by a U.S. regulator for charging customers higher fees in mutual fund sales, two months after AIG Chief Executive Officer Peter Hancock said he would divest the insurance company’s brokerage amid stricter rules.
Royal Alliance Associates, SagePoint Financial and FSC Securities steered clients into more expensive classes of mutual funds, earning an extra $2 million in fees, according to a statement Monday from the U.S. Securities and Exchange Commission. AIG agreed to pay $9.5 million to settle the regulator’s claims and didn’t admit or deny the regulator’s findings.
Hancock said in January he’s exiting broker-dealer operations amid Department of Labor scrutiny on how advisers pitch retirement products, and the unit would be better owned independently. The company owns a large retirement operation, which contributed $2.84 billion to pretax operating income last year, the bulk of the profit from the consumer segment.