WFG Advisors Fined, Censured $100k for Overcharging Customers in Alt Investment, REIT Sales

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The SEC fined WFG Advisors $100,000 for overcharging clients in alternative investments, including REITs and BDCs due to inadequate policies and procedures to prevent overcharging.

SEC Proceeding #3-17320

According to the investigation, the investment advisory affiliate of Williams Finance Group overbilled 35 accounts a total of $34,640.63 in advisory fees, having falsely stated in SEC forms that clients participating in the firm's "wrap" program would not be charged commissions for transactions in their accounts.

Instead, investigators say, WFG Advisors didn't have the "technological capability to prevent or detect" the overcharge activity, which occurred when the firm inappropriately charged clients both a commission and advisory fee for the same alternate investment product transactions, including REITs and BDCs.

The findings indicate WFG Advisors had told clients in the "wrap" account program that it would charge them a commission to purchase interests in the alt investments, but not an advisory fee, even though those same customers ended up with charges for both commissions and advisory fees.

The SEC order indicates that WFG Advisors "was aware of the risk that its policies and procedures were not adequate," but nonetheless failed to perform work or implement policies and procedures reasonably designed to achieve compliance and ensure that clients' advisory fees were calculated and billed in an accurate and prompt manner consistent with how the firm had advertised and disclosed its services and fee schedule to clients.

The SEC also found that WFG's Compliance Department did not have adequate staff on hand to ensure its billing and disclosure practices were consistent.

If you have invested with WFG Advisors or with any firm who has overcharged or double-billed you for commissions and advisory or other fees that was not properly disclosed to you, and these unexpected or excessive charges have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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