Cetera Advisors LLC has agreed to pay more than $628,000 in restitution to customers who were overcharged in certain mutual fund purchases. According to the Financial Industry Regulatory Authority (FINRA), between July 1, 2009 and January 1, 2017, Cetera Advisors disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares of certain mutual funds without a front-end sales charge. The customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.
Cetera Advisors is headquartered in Denver, Colorado, with approximately 1,788 registered representatives and 961 branch offices. According to the Letter of Acceptance, Waiver and Consent (AWC) submitted to FINRA, Cetera Advisors failed to reasonably supervise the application of the sales charge waivers to the eligible mutual fund sales, relying on its financial advisors to determine the applicability of sales charge waivers. Further, Cetera Advisors allegedly failed to adequately notify and train its financial advisors regarding the availability of mutual fund sales charge waivers for eligible customers. Without admitting or denying the findings, Cetera Advisors was censured, required to provide a remediation plan to FINRA, and agreed to pay restitution to eligible customers who were overcharged an estimated $628,040. Continue Reading