NEW YORK, April 3 The U.S. Securities and
Exchange Commission on Thursday fined Transamerica Financial
Advisors of St. Petersburg, Fla. $553,624 and ordered it to
reimburse clients the same amount for improperly calculating
advisory fees and overcharging clients.
Transamerica, which has been registered as a financial
adviser since 1991, agreed to the settlement and has reimbursed
2,304 current and former client accounts with refunds and
credits, the U.S. regulator said.
A Transamerica spokeswoman did not immediately return a call
The firm promotes to clients so-called breakpoint discounts
that reduce fees owed as clients increase assets in certain
investment programs. It allows them to aggregate values of
related accounts to qualify for the discounts.
The SEC found, however, that Transamerica since 2009 failed
to process every aggregation request by clients and also had
conflicting policies throughout its branches on whether its
representatives were required to pass savings from the
breakpoint discounts to clients.
The regulator, which had first alerted Transamerica about
aggregation problems in 2010 after an examination of a branch
office, had inadequate policies and procedures to ensure that
fees were being calculated properly. It also failed to undertake
a firm-wide review of all client accounts as SEC examiners had
recommended in 2010.
Transamerica agreed to a censure without admitting or
denying the SEC's findings and must cease and desist from any
further violations of the applicable securities laws. It agreed
to hire an independent consultant to review its policies and
procedures pertaining to its account opening forms, fee
schedules, and fee computation methodologies.
A regulatory filing by an advisory unit of Transamerica said
the firm charges either a fixed fee with a minimum of $250 for
its advisory services, or an hourly fee ranging from $25 to
$300, in addition to fees for buying and selling managed account
The SEC charges recall its broad finding of Wall Street
breakpoint malfeasance a decade ago. In 2004, 15 large brokerage
firms agreed to pay more than $21.5 million in fines and over
$86 million in "disgorged" profits to settle charges of denying
breakpoint discounts to mutual fund customers.
(Reporting By Jed Horowitz; editing by Andrew Hay)