Transamerica to Pay $8.8M Over Annuity, Fund & 529 Supervisory Failures

From Jan. 1, 2009, through Nov. 15, 2016, Transamerica Financial Advisors relied on representatives to determine whether sales charge waivers applied to customers' mutual fund purchases, and the firm failed to provide guidance to representatives to help them make this determination, FINRA said.

During that period, Transamerica Financial Advisors also failed to establish a system to verify whether waivers were properly applied, and the firm ended up failing to apply about $438,239 sales charge waivers that were available to customers, FINRA said.

Over a period from May 1, 2010, through May 31, 2015, Transamerica Financial Advisors failed to provide enough supervision of representatives' recommendations to customers to buy particular share classes of 529 savings plans, FINRA said.

Transamerica Financial Advisors also failed to provide adequate guidance to representatives about the importance of considering share-class differences when recommending 529 plans, and it failed to provide supervisors with the information necessary to properly evaluate the suitability of 529 share-class recommendations, FINRA said.

FINRA identified the concerns included in the settlement during a FINRA cycle examination, the regulatory organization said.

The Transamerica Financial Advisors spokesperson said in the company's statement that the $4.4 million in restitution ordered includes restitution of $438,239 that was already paid to 433 customers during FINRA's examination regarding allowable fee waivers for mutual fund share-class purchases.

"Under the settlement, affected investors will receive amounts from a fund administered by a third-party settlement administration firm," the Transamerica Financial Advisors spokesperson said.

"TFA cooperated fully with FINRA throughout the proceeding, and the settlement announcement concludes FINRA's proceeding," the Transamerica Financial Advisors spokesperson said. "TFA is confident in its investment recommendations and remains committed to continuously improving its business practices."