Salem, Oregon – Edward D. Jones & Co. L.P., commonly referred to as Edward Jones, agreed to a $17 million multistate settlement in response to a major enforcement action headed by the Oregon Division of Financial Regulation (DFR). This agreement follows a thorough four-year investigation of the financial services company’s policies on moving clients from brokerage services to fee-based advising accounts.
Under the North American Securities Administrators Association (NASAA), a working group of 14 state securities regulators investigated Edward Jones’s handling of client moving their brokerage assets into advisory accounts, especially in light of the 2016 U.S. Department of Labor Fiduciary Rule. Especially for retirement funds, this legislation sets a fiduciary standard of care, meaning advisers must basically operate in the best interests of their clients.
The main point of contention was Edward Jones charging front-loaded charges for Class A mutual fund shares. When clients sold or transferred these shares earlier than intended, these costs were deemed inappropriate since this could compromise the financial advantages of long-term investing strategies under adviser accounts. According to the inquiry, Edward Jones lacked strong supervisory policies meant to stop or minimize similar incidents.
Along with Washington, D.C., the U.S. Virgin Islands, and Puerto Rico, Edward Jones is scheduled to distribute about $320,000 to each of the 50 states in part of the resolution. This settlement seeks to resolve the discovered supervisory failures from the investigation.
“In partnership with NASAA and other state securities regulators, we will continue to protect Main Street investors and ensure that companies operating in Oregon follow our securities laws,” said TK Keen, DFR administrator.
“DFR appreciates the ongoing cooperation of Edward Jones throughout this investigation and settlement process. Firms that offer both brokerage and investment advisory services must ensure customers receive the services they need at a fair and transparent price.”
The DFR has underlined again its dedication to protect investor interests and advised anyone who feels they might have been victim of financial misconduct to get in touch. To help or to report a complaint, Oregonians can call DFR’s consumer advocates toll-free at 888-877-4894 or by email [email protected].
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Especially when handling the transfer between several kinds of investment accounts, this settlement represents a significant step in maintaining the integrity of financial advisory services and guaranteeing that financial service providers act honestly and fairly.
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