Ameriprise Financial Services Allegedly Overcharges Retirement Customers

1,791 Ameriprise Financial Customers reportedly overpaid a total of $1,778,592.31 in Higher-fee mutual fund shares.

According to the Securities and Exchange Commission, on February 28^th,the regulator announced that Ameriprise Financial Services Inc. has agreed to settle charges for recommending and selling higher-fee mutual fund shares to retail retirement account customers and for failing to provide sales charge waivers.

The Minnesota-based broker-dealer and investment adviser allegedly disadvantaged certain retirement account customers by failing to ascertain their eligibility for less expensive mutual fund share classes, according to the SEC’s order.

Ameriprise allegedly recommended and sold these customers more expensive mutual fund share classes when less expensive share classes were available.  Ameriprise also reportedly failed to disclose that it would receive greater compensation from the purchases and that the purchases would negatively impact the overall return on the customers’ investments.

Due to Ameriprise’s alleged practices, approximately 1,791 customer accountspaid a total of $1,778,592.31 in unnecessary up-front sales charges, contingent deferred sales charges, and higher ongoing fees and expenses.

According to the SEC, Ameriprise generated greater revenue for itself but lower returns for its retirement account customers by recommending higher-fee share classes.

Ameriprise has reportedly identified the affected accounts, issued payments including interest to the affected customers. The firm has converted eligible customers to the mutual fund share class with the lowest expenses for which they are eligible, at no cost.

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This information which is publicly available on the SEC’s website has been provided by The White Law Group.

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