Friday, January 8, 2016

FINRA Penalizes Big Brokers For Overcharging For Mutual Funds

InvestmentNews reported that some of the biggest brokerages were caught overcharging their customers for mutual fund purchases. The guilty parties were fined for overcharging customers for charitable and retirement accounts. The companies and their fines:

Wells Fargo Advisors paid $15 million
Edward D. Jones & Co. paid $13.5 million
Raymond James Financial Services Inc. paid $8.7 million
LPL Financial paid $6.3 million
Stifel Nicolaus & Company Inc. paid $2.9 million
Janney Montgomery Scott paid $1.2 million

These problems may have been avoided had the industry been held to the Fiduciary Standard. Currently, they are held to the Suitability Standard, and there is a big fight taking place to prevent the higher standard of care of the Fiduciary Standard from taking place. RIAs, Registered Investment Advisers, are held to the Fiduciary Standard and have fewer conflicts of interest than run-of-the-mill brokerage houses.

Check out the rest of the violators and fines paid here.

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