SEC Fines Thrivent Investment Management for Red BI Violations

Posted on October 25th, 2024 at 1:27 PM
SEC Fines Thrivent Investment Management for Red BI Violations

From the desk of Jim Eccleston at Eccleston Law

The Securities and Exchange Commission (SEC) has imposed a $25,000 fine on Thrivent Investment Management for violating Regulation Best Interest (Reg BI) in its investment recommendations to retail brokerage clients. The SEC found that between June 2020 and July 2022, Thrivent recommended higher-cost Class A mutual fund shares in two 529 college savings plans—the Nebraska NEST Advisor College Savings Plan and the Illinois Bright Directions Advisor-Guided 529 Plan—over lower-cost Class C shares, resulting in additional costs for clients.

Class A shares require upfront sales charges and have lower annual fees than Class C shares, which lack upfront fees but carry higher annual costs for the first 10 years before converting to Class A shares. As reported by ThinkAdvisor, Thrivent’s representatives used a share class calculator to guide their recommendations, but the firm failed to update this calculator after both plans reduced their Class C fees in 2020. This oversight led to continued recommendations of the more expensive Class A shares, misrepresenting cost comparisons to clients.

The SEC stated that Thrivent neglected to review and adjust its calculator for the updated expense structures, failing to exercise the due diligence Reg BI mandates. Thrivent’s lack of updated policies, procedures, and compliance measures also fell short of Reg BI’s General Obligation under Rule 15l-1(a)(1), resulting in a willful violation of the regulation.

Thrivent accepted the SEC’s findings and sanctions without admitting or denying the charges.

 

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

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next

We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele

LATEST NEWS AND ARTICLES

May 2, 2025
Former Edward Jones Broker Indicted for Defrauding Elderly Widow

Federal prosecutors have indicted a former Edward Jones financial advisor on charges of wire fraud, mail fraud, money laundering, and tax violations after he allegedly stole more than $920,000 from a 77-year-old widowed client.

May 1, 2025
FINRA Fines Sanctuary Wealth $150,000 for AML Program Deficiencies

FINRA has fined and censured independent broker-dealer Sanctuary Wealth Management $150,000 for failing to establish an adequate anti-money laundering (AML) program to detect and report suspicious transactions.

April 30, 2025
Cambridge Investment Research Advisors to Pay $15 Million Fine Over Undisclosed Conflicts in Investment Recommendations

Cambridge Investment Research Advisors (CIRA) has agreed to pay $15 million to settle allegations brought by the Securities and Exchange Commission (SEC), which accused the firm of failing to disclose multiple conflicts of interest in its investment recommendations.