Fidelity Fined $350,000 for Overcharging Customers
Fidelity Investments Group, the third-largest custodian as ranked by the number of registered investment adviser clients, recently has been fined $350,000 by FINRA for overcharging more than 20,000 clients a total of $2.4 million.
Between January 2006 and September 2013, Fidelity inappropriately charged for certain transactions in fee-based accounts in its Institutional Wealth Services group, which provides trading and brokerage services to investment advisers and their clients.
According to FINRA, the overcharges resulted from a gap in supervision over how Fidelity applied fees under its asset-based pricing model. As a result, certain clients might have been double-billed or charged excess commissions in addition to the asset-based management fee.
Fidelity discovered the problems in the spring of 2012, self-reported the issue to FINRA and voluntarily reimbursed all clients. The issues affected roughly 1.5% of the brokerage accounts held for investment advisers and the majority required reimbursement of less than $100.
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