FINRA censured and sanctioned Lincoln Investment Planning, LLC for failing to apply available sales charge waivers to eligible retirement accounts and charitable organizations from 2011 through June 2018. The findings state that Lincoln disadvantaged certain retirement plan customers by selling them Class A shares with front-end sales charges or Class B and Class C shares with back-end sales charges and higher ongoing fees, when these investors were eligible to purchase Class A shares without sales charges via a waiver.
According to the regulator's report, Lincoln's deficient supervisory systems and procedures prevented the firm from identifying applicable sales charge waivers in fund prospectuses for eligible customers.
Investigators concluded that this, combined with a failure to adequately notify and train financial advisors regarding the availability of mutual fund sales charge waivers, resulted in sales of Class A shares with front-end sales charges, or Class B/C shares with back-end sales charges and higher ongoing fees and expenses, when the investor should have been given the option to purchase Class A shares with the sales charges waived.
Lincoln Investments is hardly the first firm FINRA has disciplined over a failure to apply sales charge waivers to eligible retirement plan accounts.
For instance, FINRA in 2017 sanctioned Investacorp and ordered nearly $250,000 in restitution over allegations that the firm failed to apply such front-end Class A sales charge waivers to eligible retirement plans and charitable organization customers, having previously sanctioned NEXT Financial and Questar Capital Corp for similar violations.
Even earlier, in 2015, FINRA ordered five firms (Edward Jones, Stifel Nicolaus, Janney Montgomery Scott, AXA Advisors, and Stephens Inc) to pay $18 million in restitution for excessive fees, including a widespread failure to apply Class A mutual fund sales charge waivers.
If you have invested with Lincoln Investment Planning or with any broker or financial adviser who has unsuitably recommended that you purchase mutual funds with back-end sales charges and higher ongoing fees and expenses that 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.