The Securities and Exchange Commission has issued a cease-and-desist order and censured Colorado Springs, Colo.-based Envoy Advisory for recommending Class A mutual fund shares to its clients when lower-cost institutional shares of the same funds were available.
The agency said the firm, which specializes in servicing retirement plans for ministers, directed the 12(b)-1 fees it received from the mutual funds to its affiliated broker-dealer, Envoy Securities. This occurred from January 2013 to March 2017, the SEC said in an administrative proceeding.
As part of its settlement with the firm, the SEC ordered Envoy to disgorge $24,893 and to pay prejudgment interest of $2,106. The firm did not immediately respond to a call for comment.
As of March 29, 2016, Envoy reported it had approximately 1,800 advisory clients with about $225 million in assets. The firm's RIA and broker-dealer share six dually-registered representatives.