According to FINRA, Independent Financial Group, LLC was censured, fined $75,000, and ordered to pay restitution to customers who did not receive available sales charge waivers on 529 plan rollovers.

When customers roll over 529 college savings plan investments from one state's plan to another, sales charge waivers or reduced-cost Class AR shares may be available. These waivers can save investors significant money, but firms must have systems in place to identify and apply them.

The firm failed to establish policies and procedures to alert representatives about the potential availability of sales charge waivers or Class AR shares for 529 plan rollovers. The firm did not provide training to representatives regarding these waivers or give supervisors guidance on how to review rollover transactions for waiver eligibility.

Although the firm later revised its procedures to direct representatives to confirm waiver eligibility with plan sponsors, the revised procedures still failed to articulate firm policy regarding whether to provide waivers and established no system for monitoring that available waivers were actually applied.

As a result, at least 18 customers with rollover transactions totaling at least $837,000 were charged at least $17,000 in fees that should have been waived. The firm must retain an outside consultant to identify all affected customers and calculate the restitution owed.

Investors considering 529 plan rollovers should ask about available sales charge waivers and verify that any applicable waivers are applied to their transactions.