Edward Jones fined $750,000 over account aggregation violations

Finra says firm did not have adequate procedures to track consolidated reports to clients

Jul 14, 2017 @ 12:53 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has fined Edward Jones $750,000 for lacking an adequate supervisory system for use of account aggregation software.

Over the period from April 2010 through 2014, Finra said Edward Jones "failed to establish, maintain and enforce an adequate supervisory system, including written procedures, concerning the creation and dissemination of consolidated reports."

(More: Edward Jones changing stance on mutual fund commissions in IRAs)

The regulator said the firm made available to its brokers two centralized and automated tools that provide templates for reports that present aggregated financial information to customers. Finra said Edward Jones had "no system or written procedures in place reasonably designed to minimize the risk that the reports could contain inaccurate information that potentially could be misused."

In addition, Finra said the firm could track only whether a report was printed, but had no system or procedures to track whether reports were provided to customers.

During the period in question, the firm's registered representatives generated approximately 52 million reports using the two tools, Finra said.

In another case involving account aggregation tools, Finra fined Wells Fargo $1 million last December for failing to have in place "reasonable supervisory systems" to monitor its reps' creation of more than five million consolidated reports for clients between June 2009 and June 2015. Finra said in its settlement that Wells Fargo was unable to distinguish between draft reports and completed reports that were sent to customers, which should have been "subjected to the supervisory systems designed to review customer communications."

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