PROVIDENCE – Massachusetts officials have opened an investigation into Wells Fargo Advisors to determine whether the company gave customers inappropriate financial advice.
William F. Galvin, secretary of the commonwealth, announced last week his office would investigate “inappropriate referrals of brokerage customers to managed and advisory accounts, unsuitable recommendations of alternative investments,” and unsuitable referrals and recommendations related to 401(k) rollovers.
“I am aware that there has been a recent trend in the industry to push investors into wealth-management accounts which may bring more revenues to the firm, but which are not suitable for investors,” Galvin said in a statement.
The investigation stems from a recent Wells Fargo regulatory filing saying the company was assessing itself to determine whether it took such inappropriate actions. Galvin said he will seek additional information to decide whether any Massachusetts investors were affected.
“Given the recent retirement savings crisis in America, referrals and recommendations involving 401(k) accounts should be closely scrutinized,” he said.
Galvin went on to criticize Wells Fargo for its recent retail banking scandal, which involved the company opening millions of unsolicited accounts for its customers to boost performance numbers.
“[The scandal] leads me to believe that where there is smoke, there’s fire,” Galvin said. “I need to be assured that Massachusetts residents haven’t been burned by corporate greed.”