Investment

Wells Fargo repays clients $40 million for excessive investment advice fees – CNBC

Published

1 year ago

August 25, 2023

In this article

Spencer Platt | Getty Images News | Getty Images

Wells Fargo paid back $40 million to almost 11,000 customers who for years were overcharged on fees for investment advice, the Securities and Exchange Commission said Friday.

The bank also agreed to pay a $35 million civil penalty to settle SEC charges. Wells Fargo neither admitted nor denied the allegations, the agency said.

Certain Wells Fargo financial advisors — including those from legacy firms acquired during a merger — agreed to reduce some clients’ standard advisory fees at the time their accounts were opened, according to the SEC.

However, internal systems failed to account for those reduced advisory fees in some cases, the SEC said. As a result, Wells Fargo overcharged 10,945 accounts — which were opened prior to 2014 — for many years, through the end of last December, the SEC said.

According to the agency, the bank’s $40 million reimbursement to affected customers includes more than $26.8 million in excessive fees plus interest.

The bank and predecessor firms — AG Edwards and Wachovia — didn’t have written policies and procedures to prevent this overbilling, the SEC said. (AG Edwards and Wachovia merged in 2007; Wells Fargo and Wachovia then did so in 2008.)

“For years, Wells Fargo and its predecessor firms negotiated reduced advisory fees with thousands of clients, but failed to honor them,” Gurbir Grewal, director of the SEC’s enforcement division, said in a written statement.

Caroline Szyperski, a spokesperson for Wells Fargo, said the firm is “pleased to resolve this matter.”

“The process that caused this issue was corrected nearly a decade ago,” Szyperski said. “And, as noted in the settlement documents, Wells Fargo Advisors conducted a thorough review of accounts and has fully reimbursed affected customers.”

How high fees can erode savings

Studies have shown that many investors are unaware they pay fees for financial services like investment advice or the mutual and exchange-traded funds they own.

That’s because the financial ecosystem often charges those fees behind the scenes. Customers typically don’t write a monthly check or get money withdrawn from their bank accounts for such services; instead, firms often collect fees from the financial account, like an individual retirement account or a 401(k) plan. Fees are often assessed as a percentage of total assets in the account.

Excessive fees can amount to large sums of money over the long-term.

Consider this example from the SEC, in which an investor makes a $100,000 initial investment that earns 4% a year for 20 years: An investor who pays a 0.25% annual fee versus one paying 1% a year would have roughly $30,000 more after two decades — $208,000, versus $179,000.

Adblock test (Why?)

Source link

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

Source link

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link