Bank of America, Raymond James to pay $12 million for college fund overcharges

Bank of America Corp (BAC.N) and Raymond James Financial Inc (RJF.N) will pay roughly $12 million in restitution to customers who incurred excessive fees on investments meant to help their children afford college, a U.S. regulator said on Wednesday.

The Financial Industry Regulatory Authority said Bank of America’s Merrill Lynch unit will pay at least $4 million and two Raymond James units will pay $8.03 million, after failing to ensure that financial advisers properly took fees into account when recommending investments in so-called 529 savings plans.

Such plans are tax-advantaged municipal securities designed to encourage saving for education, and sponsored by U.S. states, state agencies and educational institutions.

FINRA said the supervisory failures caused Merrill and Raymond James customers, especially those with young children many years away from college, to incur higher fees than they should have.

Source: Reuters

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