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Regulation

FINRA censures Voya over mutual fund sales

The Financial Industry Regulatory Authority censured Voya Financial Advisors for steering clients to pay higher fees than they were actually required to pay in mutual fund transactions, according to a letter of acceptance, waiver and consent published Tuesday.

FINRA said that from Jan. 1, 2009, through May 26, 2016, Voya sold retirement plan and charitable organization clients Class A shares of some of its mutual funds that came with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. FINRA noted that some of the mutual funds available on the Voya's retail platform during the period in question offered waivers for the up-front sales charges associated with Class A shares for certain retirement plans and/or charitable organizations.

Voya "failed to reasonably supervise" the application of sales charge waivers to eligible mutual fund sales and relied on its financial advisers to determine the applicability of sales charge waivers, "but failed to maintain adequate written policies or procedures to assist financial advisers in making this determination," FINRA said.

Among the sanctions imposed, Voya must submit to FINRA a schedule of eligible customers identified for remediation and include the details of the qualifying purchases and total dollar amounts of restitution that will be provided to each customer. Each eligible customer will receive restitution, plus interest, from the date of purchase through the payment date, FINRA said.

In a statement, Voya said ensuring its customers receive the appropriate products and services is core to its company focus. "Following our initiation of a review of the sales of certain classes of mutual funds, Voya Financial Advisors, Voya's retail firm, reported the matter to FINRA and worked with them to ensure that customers were made whole for additional fees that they were charged," the company said. "We have revised our procedures to address this issue going forward and avoid a recurrence of it. We are pleased to have resolved this issue and to have provided full reimbursement to our customers."