A four year investigation by state regulators has left Edward Jones with a $17 million penalty resulting from overcharging certain customers for mutual fund sales fees.
The North American Securities Administrators Association has announced the settlement of a probe into the dealer-broker’s supervision of customers paying front-load commissions for class A mutual fund shares who later transitioned from brokerage to fee-based investment advisory accounts, making investment advice to retirement accounts subject to a fiduciary standard of care under the 2016 U.S. Department of Labor (DOL) Fiduciary Rule.
Those affected were some customers who sold or moved their mutual fund shares sooner than anticipated. A working group of 14 state regulators discovered gaps in the firm’s supervisory process in this regard.
A spokesperson for Edward Jones told InvestmentNews: “Our financial advisors take a personalized approach understanding our clients' needs and objectives. We are aligned with regulators that protecting investors is a top priority and we are committed to maintaining robust supervisory and compliance systems and continually improving them.”
Edward Jones will pay each of the 50 states, Washington DC, the US Virgin Islands, and Puerto Rico an administrative fine of approximately $320,000. This figure was set following assessment of several factors including the positive performance of the investment advisory accounts as compared to the brokerage accounts.
“This settlement reflects the collaborative and determined approach state securities regulators take to resolve a national problem,” said Amanda Senn, NASAA Enforcement Section Committee Co-Chair, and director, Alabama Securities Commission. “We appreciate the ongoing cooperation of Edward Jones throughout this investigation and settlement process. Firms that offer both brokerage and investment advisory services should be mindful that customers are receiving the services the customer wants at an appropriate price.”
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.
With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.
Professional athletes are often targets of scam artists and are particularly vulnerable to fraud.
The brokerage giant tells Wall Street it will use artificial intelligence to reach clients it has never been able to serve — and turn the technology's perceived threat into a competitive edge.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
