Wells Fargo Fires Brokers over Improper Insurance Sales Practices
Wells Fargo Advisors has reportedly fired at least three brokers in California and Florida based on allegations of improper insurance sales practices, according to an article yesterday in AdvisorHub, citing Central Registration Depository records.
When Wells Fargo filed the U5s (CRD termination forms) in January, it noted the firings are in connection with sales credits that the brokers had wrongfully earned on insurance policies that were cancelled shortly after they were issued.
The alleged violations took place between 2011 and 2015 while the brokers were working as personal bankers at Wells Fargo Bank before they shifted to become brokers at Wells Fargo Advisors, according to the article.
The company has been in the process of an “ongoing clean-up” almost five years after the company’s fake account scandal in 2016 and subsequent settlements, according to AdvisorHub.
The publication interviewed an unnamed brokerage industry recruiter who reportedly said he knew of a fourth broker discharged in Dallas in recent months over similar violations and speculated that “Wells Fargo may have been uncovering older allegations as it reached out to customers to make remediation efforts tied to regulatory settlements.”
Regulators have apparently been focusing on commission- and sales-credit-seeking issues, including improper insurance sales at the consumer bank since Wells Fargo Bank’s account scandal in 2016.
In March 2018, Wells Fargo agreed to pay $1 billion to settle with US regulators after allegations that “the bank wrongly layered insurance on hundreds of thousands of drivers and routinely hit homebuyers with excessive fees,” according to AdvisorHub citing Reuters. Apparently the company agreed to pay another $386 million in 2019 over sales of unwanted auto insurance, according to another Reuters report.
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