ST. PETERSBURG -- Three financial firms are being ordered to refund millions to investors in college savings plans, who got put into funds that weren't appropriate for their planning timelines.
Raymond James and Associates and Raymond James Financial Services, both based in St. Petersburg, will hand over a total of eight million dollars in restitution to customers. Merrill, a unit of Bank of America formerly known as Merrill Lynch, will refund four million dollars.
The Financial Industry Regulatory Authority says the two firms sold a product to college savers with very young children known as Class C shares, that has lower front-end costs but higher annual fees. According to FINRA, Class A shares, which impose higher front-end costs but lower fees, are often a more suitable option for accounts with younger beneficiaries and longer investment horizons
FINRA has launched a campaign to encourage financial firms to self report potential violations in 529 plans. It says Raymond James and Merrill cooperated in the probe.
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