Galvin Questions Advisory Firms About Interest Rates and Sweep Accounts

Posted on March 23rd, 2022 at 9:49 AM
Galvin Questions Advisory Firms About Interest Rates and Sweep Accounts

From the Desk of Jim Eccleston at Eccleston Law:

Massachusetts Commonwealth Secretary William Galvin is pressing six large advisory firms on whether they are failing to escalate interest rates for clients with funds in sweep accounts after the Federal Reserve’s recent rate increase.
Specifically, Galvin is questioning TD Ameritrade, Merrill Lynch, LPL Financial, Ameriprise, Securities America and SoFI if they intend to raise interest rates. Galvin added that regulators anticipate additional rate hikes in 2022 while investors will likely face increased mortgage and credit card rates. Since clients are also facing problems related to inflation, Galvin seeks to determine whether firms are short-changing investors by sticking with low interest rates for cash deposits even as rates continue to rise.
Galvin’s investigation emphasizes sweep accounts, which advisory firms typically use to hold investor capital before it is invested. Galvin indicated that the investigation initially will focus on six advisory firms that feature a multitude of sweep account offerings, but that the investigation may be expanded to include additional firms.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.


Tags: eccleston law william galvin, advisory firms

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