NEW YORK — Bank of America’s (BAC) Merrill Lynch unit was fined $8 million and will reimburse $24.4 million to customers to settle allegations that it overcharged more than 47,000 retirement accounts and charities that invested in mutual funds.
The Financial Industry Regulatory Authority, Wall Street’s self-funded regulator, said Monday that the restitution is in addition to $64.8 million that Merrill has already repaid, making the total payout about $97.2 million including the fine.
Like many rivals, Merrill has offered mutual fund shares in multiple classes. Typically, Class A shares carry lower fees than Class B and C shares, but also carry upfront sales charges.
FINRA said Merrill failed to provide promised sales charge waivers on many retirement accounts for more than five years beginning in January 2006, relying instead on financial advisers it didn’t properly supervise to do so.
As a result, about 41,000 small business retirement plans, and 6,800 charities and 403(b) retirement plan accounts available to ministers and public school employees, improperly paid sales charges on Class A shares or bought other share classes carrying higher fees, FINRA said.
Roughly 16,200 of these accounts will share in the $24.4 million payout, settlement papers show.
“Investors must be able to trust that their brokerage firm will offer the lowest-cost share classes available to them,” FINRA enforcement chief Brad Bennett said in a statement.
Merrill neither admitted nor denied FINRA’s charges in agreeing to settle.
A spokesman, Bill Halldin, said Merrill notified FINRA and voluntarily began making refunds after discovering the matter, which didn’t affect individual brokerage accounts or individual retirement accounts.
Bank of America is based in Charlotte, North Carolina, and bought Merrill on Jan. 1, 2009.
Your credit score can affect your ability to start a family, buy a house or replace a car. Once you’ve married, your partner’s credit score can be your problem, too, and it’s not one you want to find out about after you file a loan application. Hint: It’s a bad sign if your intended can’t or won’t answer this question.
1. What's Your Credit Score?
Most of us consider this to be a closely guarded secret, but you can’t hide it from your soon-to-be spouse for long. Nor should you. As you plan a life together, you need to know that both of you have realistic hopes and expectations about the lifestyle you’ll enjoy.
2. What's Your Income?
You should know whether the person you’re about to marry is living paycheck-to-paycheck. Many young people just starting out haven’t banked much, and can’t. But together you can work out a plan to establish an emergency fund covering three to six months of expenses.
3. How Much Do You Have In Savings?
A truly embarrassing question, but one that must be asked. Marrying someone makes their debt yours, too. And a substantial debt can wreck the lifestyle you want together. There is a worst-case scenario here: If the person you’re planning to marry is skipping out on obligations like a student loan, credit card payments or child support, you might rethink your choice of partner. If your loved one just has poor spending habits, work it out together now.
4. What Debts Do You Have?
As a couple, you need to decide whether you will keep your money in separate or joint bank accounts. Kadish notes that many couples opt for both, with a joint account for family expenses and separate personal accounts to cover day-to-day spending. Agreeing in advance on their use prevents squabbles later, not to mention the potential for bounced checks.
5. How Do You Feel About Joint Bank Accounts?
Talk about whether the health coverage each of you has is adequate to your needs as a couple. You may find that your partner’s policy is better than yours, and that you can opt into it.
6. What Kind of Health insurance Do You Have?
You or your spouse may have other job benefits that affect your joint planning. If, for example, one of you is eligible for a pension, that’s a factor in your retirement planning. In any case, there’s paperwork to be done, like adding your spouse’s name as a beneficiary.
7. What Benefits Does Your Employer Offer?
As a couple, you need to hash out your expectations for day-to-day life, and month-to-month spending. Will you eat out often? Is an annual vacation necessary to your well-being? Would you rather sit on the floor than buy furniture on credit? You need to understand each other’s priorities. And if you’re wise, you’ll craft a spending plan that formalizes those priorities, so you’re not spending carelessly.
8. Can We Talk Budgeting?
Your retirement benefits are an asset that each of you brings to the marriage. You need to know what each of you is contributing now, and make changes if necessary. If, for example, your partner has a better 401(k) matching plan, it could affect your joint savings decisions.
9. What's Going Into Your Retirement Accounts?
You’re getting ready to share the rest of your life with another person. Make sure you share dreams and aspirations as well. The colorless phrase "financial goals" covers a host of expectations for your life ahead. But you can’t reach those goals without a plan — so start crafting it now.
10. What Are Your Financial Goals?
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