Tr?id=566623520170033&ev=PageView&noscript=1

Wells Fargo Resolves SEC Dispute Over Advisory Fees

Posted on September 5th, 2023 at 1:18 PM
Wells Fargo Resolves SEC Dispute Over Advisory Fees

From the desk of Jim Eccleston at Eccleston Law 

The Securities and Exchange Commission (SEC) announced charges against Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC (collectively, “Wells Fargo”). The charges are related to overcharging advisory fees to over 10,900 investment advisory accounts, resulting in a total excess of $26.8 million. To resolve the SEC's charges, Wells Fargo has agreed to pay a civil penalty of $35 million.

The SEC's order states that specific financial advisers from Wells Fargo and its predecessor firms agreed to lower standard advisory fees for particular clients. When opening their accounts, they manually changed the clients' investment advisory agreements to reflect these reduced fees. However, in some instances, the account processing employees at Wells Fargo and its predecessor firms neglected to input the agreed-upon lower advisory fee rates into the billing systems while setting up the clients' accounts.

Furthermore, Wells Fargo failed to establish and implement written compliance policies and procedures that could reasonably ensure the accuracy of data in the adopted billing systems and prevent the overbilling of clients acquired from predecessor firms and some new clients. Consequently, Wells Fargo and its predecessor firms inaccurately billed certain clients who opened accounts before 2014 for advisory fees until the end of December 2022.

Wells Fargo compensated the impacted account holders around $40 million, encompassing interest, as reimbursement for the excessive charges. Alongside a $35 million penalty, Wells Fargo, without admitting or denying the SEC charges, consented to the Commission's order, which acknowledged the firm's violation of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. The firm also agreed to a cease-and-desist order and censure.

 

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

 

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

1779287606 Law
May 20, 2026
FINRA Sanctions Ameriprise for Supervisory Failures in Variable Annuity Exchanges

The Financial Industry Regulatory Authority (FINRA) has fined Ameriprise Financial Services and ordered restitution to resolve allegations that the firm failed to adequately supervise certain variable annuity exchange recommendations.

1779216500 Law
May 19, 2026
SEC Fines Ally Invest Advisors Over Undisclosed Robo-Advisor Conflict

The Securities and Exchange Commission (SEC) imposed a $500,000 penalty on Ally Invest Advisors after finding that the firm failed to disclose a material conflict of interest tied to its Cash-Enhanced robo-advisor accounts.

1779206639 Law
May 19, 2026
Federal Court Upholds FINRA's Authority in Alpine Securities Challenge

A federal court has rejected a broad constitutional challenge to the authority of the Financial Industry Regulatory Authority (FINRA), delivering a significant victory for the self-regulator and reinforcing its enforcement framework.