(Adds response from Transamerica and description of firm,
paragraphs 2, 7)
NEW YORK, April 3 The U.S. Securities and
Exchange Commission on Thursday fined Transamerica Financial
Advisors $553,624 and ordered it to reimburse clients the same
amount for improperly calculating advisory fees and overcharging
Transamerica, a St. Petersburg, Florida-based broker-dealer
that provides products and services to independent brokers,
agreed to the settlement and has reimbursed 2,304 current and
former client accounts with refunds and credits, the U.S.
The firm promotes so-called breakpoint discounts that reduce
fees 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 that since 2009, Transamerica failed to
process client aggregation requests and also had conflicting
policies throughout its branches on whether representatives were
required to pass savings from the breakpoint discounts to
The regulator, which had first alerted Transamerica about
aggregation problems in 2010, also said the firm 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
Transamerica agreed to a censure without admitting or
denying the SEC's findings. The firm must cease and desist from
any further violations of the applicable securities laws, and 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.
"We are pleased to have concluded this matter," a
spokeswoman for the firm wrote in an email that said the errors
occurred in three different managed account programs. "The
failure to link accounts was unintentional."
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 and David