Advisor Group units fined for capital violations

Finra censures Royal Alliance, FSC, SagePoint, Woodbury, levies $550,000 in fines

May 4, 2017 @ 2:30 pm

By InvestmentNews

Four units of the Advisor Group have been censured and fined by Finra for miscalculating their advisory fee income, resulting in net capital deficiencies and financial reporting inaccuracies.

According to a letter of acceptance, waiver and consent, the firms — Royal Alliance Associates, FSC Securities Corp., SagePoint Financial and Woodbury Financial Services — agreed to censures and fines of $260,000, $150,000, $75,000 and $65,000, respectively. The violations occurred between January 2010 and April 2016 in the case of Royal Alliance, FSC and SagePoint, and between January 2014 and March 2016 at Woodbury.

All the firms had errors in their general ledgers, balance sheets and trial balances, and net capital computations, Finra said, and because of those errors, Royal Alliance, FSC and SagePoint were operating in violation of the net capital rule for one month.

American International Group in January 2016 sold what was then called the AIG Advisor Group to private-equity firm Lightyear Capital and Canadian pension manager PSP Investments.

In addition to censuring and fining the firms, Finra fined Inger Wilson Fields $5,000 for her role as financial and operations principal for the firms and suspended her for a month from working in that capacity with any Finra member firm.

In response to a request for comment, a spokesperson for the Advisor Group emailed: "The Advisor Group family of advisory firms (Royal Alliance Associates, FSC Securities Corp., SagePoint Financial and Woodbury Financial) is pleased to have successfully concluded Finra's inquiry into legacy accounting practices related to prepaid investment advisory fees. As a matter of policy, Advisor Group does not comment on regulatory settlements."

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

WisdomTree's Maute: Developing elegant tech-enabled solutions

Advisers need unique technology-enabled solutions in order to have more time to expand their practice, according to WisdomTree's Alisa Maute. What can be done today to create a more thriving business of tomorrow.

Latest news & opinion

Nontraded BDC sales in worst year since 2010

The illiquid product's three-year decline is partially due to new regulations and poor performance.

Tax reform debate sparks fresh interest in donor-advised funds

Schwab reports new accounts up 50% from last year, assets up 33%.

Nontraded REITs to post worst sales since 2002

The industry is on track to raise just $4.4 billion, well off the $19.6 billion it raised just four years ago, as new regulations hinder sales.

Broker protocol for recruiting a boon for clients

New research finds advisers whose firms have joined the agreement take better care of customers.

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print