DOL Involved in Wells Fargo Wealth Investigation: Report
While the bank disclosed the review of retirement-plan issues in a regulatory filing, it did not name the specific agencies involved.
The Labor Department is reportedly examining if Wells Fargo has been encouraging participants in corporate 401(k) plans to move their assets into individual retirement accounts, according to a story Thursday in The Wall Street Journal.
The DOL also wants to know if Wells Fargo’s retirement-plan unit pushed clients to obtain in-house funds, which involve front-end loads or fees. In addition, the Justice Department and Securities and Exchange Commission also are looking into the bank’s retirement-plan practices, sources told the Journal.
The news comes about two months after Wells Fargo disclosed that regulators were reviewing such issues in its 10-K report of March 1, though the filing did not name the specific agencies involved in the investigation. A week ago, the bank agreed to pay a fine of $1 billion related to problems in its auto and mortgage-lending operations.
“This is a big deal. Earlier investigations were related to banking. Now it’s … is finally hitting [its] advisory business,” said recruiter Danny Sarch of Leitner Sarch Consultants, when the news emerged in early March. Sarch says that since then he has been contacted by a number of advisors with Wells Fargo who are considering their options.
Recently, four Wells Fargo advisors with over $1 billion in client assets left to join RBC Wealth Management.
Wells Fargo said it was “committed to thorough reviews of Wealth and Investment Management,” according to a statement obtained by ThinkAdvisor.
“The disclosures in the 10-K filing reflect our continued commitment to transparency, even when all of the information or the final outcome of a matter may not be known just yet. We are making significant progress in our work to identify and fix any issues, make things right, and build a better, stronger company.”
— Check out Wells Fargo May Not Be Done Paying for Its Misdeeds on ThinkAdvisor.