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FINRA Cracking Down on Wealth Transfer Failures

FINRA fined LPL Financial, J.P. Morgan Securities, Morgan Stanley, Merrill Lynch and Citigroup for failing to ensure asset transfers on legally mandated dates for at least 80,585 accounts. Most of the failures — or 53,384 — came from Morgan Stanley. Merrill Lynch had the second-highest failure rate with 15,366. Collectively, the firms will pay $1.4 million in fines across separate cases, in amounts ranging from $200,000 to $300,000 each. The companies consented to FINRA’s findings without admitting or denying the charges.

As baby boomers begin to move transfer trillions of dollars to their heirs through trusts or inheritance, “the wealth transfer issue is going to be significant” for the financial services industry in coming decades, says Benjamin Edwards, a professor of law and director of the Investor Protection Clinic at the University of Nevada in Las Vegas.