Edward Jones to Pay $17M Over Front-Load Commissions

The Guided Solutions plan was one of Edward Jones' advisory accounts.

Beginning in 2016, Edward Jones "communicated to its FAs how the requirements of the DOL Rule would impact different types of retirement accounts," the ruling states. "This included placing the status of 'grandfathered' on brokerage retirement accounts — a status that would impose limitations on investment activities within the brokerage account. Importantly, these included strict limitations on trading, meaning a customer could not continue to build on their investment portfolio within a brokerage-only account."

“Today’s settlement shows once again that state securities regulators will take decisive action to protect investors,” said Leslie Van Buskirk, NASAA president and administrator of the Division of Securities, Wisconsin Department of Financial Institutions. “State securities regulators continue to lead the effort to ensure that firms always have their customers’ best interest in mind."

As part of the settlement, Edward Jones will pay each of the 50 states, Washington, D.C., the U.S. Virgin Islands and Puerto Rico an administrative fine of approximately $320,000.

“Our financial advisors take a personalized approach understanding our clients' needs and objectives," a spokesperson for Edward Jones said Wednesday. "We are aligned with regulators that protecting investors is a top priority and we are committed to maintaining robust supervisory and compliance systems and continually improving them.”

In evaluating the supervisory failures and determining the appropriate resolution, the states considered certain facts such as the positive performance of the investment advisory accounts as compared to the brokerage accounts.

“This settlement reflects the collaborative and determined approach state securities regulators take to resolve a national problem,” said NASAA Enforcement Section Committee Co-Chair Amanda Senn, director, Alabama Securities Commission. “We appreciate the ongoing cooperation of Edward Jones throughout this investigation and settlement process. Firms that offer both brokerage and investment advisory services should be mindful that customers are receiving the services the customer wants at an appropriate price.”