Articles Posted in Brokerage Firms In The News

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Houston, Texas-based VALIC Financial Advisors, Inc. (VALIC) was hit with a $1.75 million fine by the Financial Industry Regulatory Authority (FINRA) for failing to prevent compensation conflicts.  VALIC is alleged to have incentivized its registered representatives to sell its own annuities and discouraged them from selling non-proprietary products.

FINRA found that from October 2011 to October 2014, VALIC failed to maintain a reasonable supervisory system to address the potential conflicts of interest created by its compensation policy, which incentivized its representatives for recommending that customers move funds from VALIC variable annuities to the firm’s fee-based platform or a VALIC fixed index annuity.  Further, FINRA found that VALIC made the compensation conflict worse by prohibiting its representatives from receiving compensation when moving customer funds from a VALIC variable annuity to a non-VALIC variable annuity, mutual fund or other non-VALIC product. Continue reading →

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Voya Financial Advisors, Inc. of Des Moines, Iowa submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuity L-shares.  Voya Financial Advisors (Voya Financial) was subject to a similar FINRA disciplinary action in 2015 which alleged the firm failed to supervise the sales of Unit Investment Trusts (UITs).

Registered with FINRA since 1968, Voya Financial, f/k/a ING Financial Partners, Inc., currently has 2,779 registered representatives and 1,485 branch offices.  FINRA found that from July 2012 to August 2014, Voya failed to establish, maintain, and enforce a supervisory system to identify red flags in the sale of variable annuity L-shares.  Further, FINRA found that Voya failed to provide its registered representatives with adequate training and guidance on suitability considerations for these multi-share class variable annuities.  According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that Voya allegedly failed to provide its advisors with reasonable guidance to discern this class of investor. Continue reading →