The SEC announced that Ameriprise Financial Services Inc. agreed to pay a $230,000 fine to settle charges that it recommended and sold higher-fee mutual fund shares to retail retirement account customers and failed to provide sales charge waivers.
The company, which did not admit nor deny the findings, was also handed a cease-and-desist order and a censure.
Ameriprise Financial Services cooperated with the commission and voluntarily identified the affected accounts, issued payments including interest to affected customers and converted eligible customers to the mutual fund share class with the lowest expenses for which they are eligible, at no cost.
The company allegedly disadvantaged certain retirement account customers by failing to ascertain their eligibility for less expensive mutual fund share classes. The company recommended and sold more expensive mutual fund share classes to these customers when less expensive share classes were available, the SEC claims.
Ameriprise Financial Services also allegedly failed to disclose that it would receive greater compensation from the purchases and that the purchases would negatively impact the overall return on the customers' investments.
Approximately 1,791 customer accounts paid about $1.8 million in unnecessary upfront sales charges, contingent deferred sales charges and higher ongoing fees and expenses as a result of Ameriprise's practices, the SEC said.
