Compliance May 6, 2019

AXA Fined for Misrepresentations About Bond Funds

FINRA claims AXA Advisors sent disclosures to 401(k) plan sponsors and participants that misrepresented the credit quality of bond funds with group annuity accounts.

Reported by

The Financial Industry Regulatory Authority (FINRA) has fined AXA Advisors $600,000 and ordered it to pay restitution in the amount of $172,461.33 to 401(k) plans for misrepresenting the credit quality of certain bond funds offered within group annuity contracts for 401(k) plans.

In a letter of acceptance, waiver and consent signed by AXA, which did not admit or deny FINRA’s findings, the regulatory authority claims that from September 2010 through November 2015, certain enrollment forms, investment options attachments and other documents created by AXA’s affiliated life insurance company misrepresented that certain bond funds were “investment grade” when they were not. In addition, FINRA accuses AXA of failing to establish, maintain and enforce a supervisory system to determine whether the documents distributed to plan sponsors and participants accurately described the credit quality of the bond funds.

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According to the letter, the misrepresentations affected approximately 800 retirement plans and 6,200 plan participants.

In addition to the fine and restitution, AXA consented to an undertaking to send corrective disclosures to all affected plan participants.

In a statement to PLANADVISER, an AXA spokesperson said, “We remain committed to transparency and accuracy in all communications and we regret this occurred. We are pleased to have resolved this matter and are providing remediation to those who may have been adversely impacted.”
Products May 6, 2019

New Morningstar Platform Enables Advisers to Research Investment Models

Called Model Marketplace, it also enables advisers to personalize strategies for clients.

Reported by

Morningstar has launched Model Marketplace, a centralized distribution platform that enables advisers to quickly research third-party investment models, personalize strategies to fit their clients’ needs and initiate trade instructions in one connected workflow.

The platform is integrated into Morningstar Office Cloud at no extra cost. At launch, the platform includes American Funds, BlackRock, Fidelity Investments Franklin Templeton, Invesco, J.P. Morgan Asset Management, Northern Trust Asset Management, OppenheimerFunds, PIMCO, Redwood Investment Management, Russell Investments, VanEck and Vanguard.

“Developing and managing modeling strategies can be complicated and time-consuming,” says Dermot O’Mahony, head of software products at Mornginstar. “Like an ‘app store’ of investment models, Model Marketplace allows advisers to research, screen and gather in-depth insight on models from different firms to determine the right strategies for their clients’ portfolios, all within a single platform.”

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