Ok, this is not an article authorizing you to be angry with your broker for the drop in your account value over the past year.  Truth be told, your losses probably keep your broker up at night more than you.

Survey of Investment Landscape

However, if you’ve purchased retail, front-loaded (“A” Share) mutual funds from a broker, financial adviser/ planner, s/he is a Registered Representative, affiliated with a Broker-Dealer (“BD”) regulated by FINRA, formerly NASD.

A Share Discounts Not Applied

 According to NASD’s 2002-03 industry-wide probe, at least one in five of all “A Share” transactions eligible for a discount did not receive it. In response, NASD required BDs to refund to each affected investor his or her actual amount of overcharge, ranging from $243 to $10,000, plus 3% interest.  Problem fixed, right?  Not exactly.

Harm to Investors Persists

In February 2011, FINRA fined Wachovia 4.41 million for, again, failing to apply sales charge discounts, causing investors to pay too much for their investments; some things never change. As of this publication, in addition to its fine, Wachovia has refunded over 5.4 million in overcharges to these investors.  This should tell you one thing: even with the well-documented history of the problem and continuing regulatory scrutiny, far too many BDs do not have a handle on this issue, and are dropping-the-ball by charging investors too much for “A Share” mutual fund purchases.

Did You Pay Too Much?

With few exceptions, you should have earned a volume discount on your “A Share” mutual fund purchases of at least $25,000.

Mutual fund companies allow you to aggregate certain of your own and other family-member accounts, although each fund family has its own rules.  This is a very nuanced topic, so even if you’ve read the fund’s prospectus, the best way to know for sure that you have not been overcharged is to consult with a trained professional to review your situation for missed “breakpoint” discounts.

 If you would like to make sure you were not overcharged, call today for a free consultation.  If you’ve been overcharged, don’t be angry.  We will help you pursue the refund you deserve.