SEC Fines Thrivent Investment Management for Red BI Violations
From the desk of Jim Eccleston at 91视频下载链接
The Securities and Exchange Commission (SEC) has imposed a $25,000 fine on Thrivent Investment Management for violating Regulation Best Interest (Reg BI) in its investment recommendations to retail brokerage clients. The SEC found that between June 2020 and July 2022, Thrivent recommended higher-cost Class A mutual fund shares in two 529 college savings plans—the Nebraska NEST Advisor College Savings Plan and the Illinois Bright Directions Advisor-Guided 529 Plan—over lower-cost Class C shares, resulting in additional costs for clients.
Class A shares require upfront sales charges and have lower annual fees than Class C shares, which lack upfront fees but carry higher annual costs for the first 10 years before converting to Class A shares. As reported by ThinkAdvisor, Thrivent’s representatives used a share class calculator to guide their recommendations, but the firm failed to update this calculator after both plans reduced their Class C fees in 2020. This oversight led to continued recommendations of the more expensive Class A shares, misrepresenting cost comparisons to clients.
The SEC stated that Thrivent neglected to review and adjust its calculator for the updated expense structures, failing to exercise the due diligence Reg BI mandates. Thrivent’s lack of updated policies, procedures, and compliance measures also fell short of Reg BI’s General Obligation under Rule 15l-1(a)(1), resulting in a willful violation of the regulation.
Thrivent accepted the SEC’s findings and sanctions without admitting or denying the charges.
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Tags: eccleston, eccleston law, sec
