Barclays refunds US$97m for overcharging clients

Banking and financial services giant Barclays Capital has agreed to refund $97 million to clients for misrepresenting services and overcharging advisory and mutual fund fees.

An investigation by the US Securities and Exchange Commission found Barclays overbilled clients to the tune of US$50 million.

It also failed to properly carry out an advisory service to monitor and perform due diligence on third-party investment managers for 2000 clients as represented.

In another incident, it collected excess mutual fund fees from 63 brokerage clients by recommending more expensive share classes when less expensive options were available.

Another 22,138 accounts were overcharged from miscalculations and billing errors.

Barclays did not confirm nor deny the SEC's findings, but agreed to create a fund to repay advisory fees to affected clients.

Barclays agreed to directly refund an additional US$3.5 million to advisory clients who invested in third-party investment managers and investment strategies that underperformed while going unmonitored.  Those funds will go to brokerage clients who were steered into more expensive mutual fund share classes, the SEC said in a statement.

In a separate incident, Barclays was fined in March by the Australian corporate watchdog for failing to inform local clients they were exempt from holding an AFSL.

Read more: SECBankingBarclays CapitalExchange CommissionUS Securities
Editor's Choice
About three-quarters of Australian institutional investors are incorporating environmental, social and governance factors in investment decisions.
Businesses looking to integrate enhanced technological capability must consider its future impacts, or else risk creating a greater trust deficit in the financial services industry.
A comprehensive review of Praemium chief executive Michael Ohanessian's termination and subsequent reinstatement determined the previous board acted inappropriately and unreasonably.
Advisers will soon have access to Challenger's deferred lifetime annuities through Colonial First State platforms.
Brought to you by
27 APR 2017
Smart beta strategies have come of age. I remember them being discussed several years ago with either cynicism or amusement among the institutional circles. Not many took 'smart beta' seriously. The tone ...
Get it Daily
Keep up to date, don't be the last to know! Get the Financial Standard Daily Newsletter.
Pocket investment guides featuring adviser case studies and a glossary.
Investing trends and strategies from the industry’s thought leaders.
Putting the spotlight on investment products that matter.
Expert Feed
Michelle Baltazar
A case for digital activism
The time is ripe for financial advisers to embrace their role as digital activists - fiduciaries who are early adopters of finance ...
Emma Rapaport
Smashed on university fees, smashed on retirement
Since Scott Morrison's pre-budget announcement that debt would be reclassified as 'good' or 'bad', the government spending spree has ...
Christopher Page
The next generation
On March 20, David Rockefeller - former Chase Manhattan chair and last of Standard Oil founder John D. Rockefeller's grandchildren ...
Michelle Baltazar
Hitting the mark
Ten years from now, every financial adviser in the country will be offering their client a managed account solution. It may happen ...
Featured Profile
Professional Subscription for $295
(inc GST) for 1 year.
FS Advice
The Australian Journal of Financial Planning.
Get the free iPad app
Download the Financial Standard iPad app for FREE.
Link to something iWFCfAT6