The bank and predecessor firms — AG Edwards and Wachovia — didn't have written policies and procedures to prevent this overbilling, the SEC said.
"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."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 Customers typically don't write a monthly check or get money withdrawn from their bank accounts for such services; instead, firms often collect fees from the financial account, like an individual retirement account or a 401 plan. Fees are often assessed as a percentage of total assets in the account.