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Wells Fargo just can’t get it together. Last week, the bank was fined $1 billion by the Consumer Financial Protection Bureau for “unfair” insurance practices. Now, the Wall Street Journal reports that the Labor Department is investigating whether the banking giant has been pushing 401(k) enrollees from low-cost plans into more expensive individual retirement accounts.

Citing a “person familiar with the inquiry,” WSJ reports that “Wells Fargo managers have pressed employees in the bank’s retirement division to recommend that clients open more expensive individual retirement accounts when they retire or leave their jobs.”

Under the Employee Retirement Income Security Act, which governs retirement accounts, banks that service retirement accounts are supposed to act as fiduciaries, meaning they put clients’ interests above their own. The whistleblower who spoke to WSJ is claiming that Wells Fargo has breached this fiduciary duty by promoting the more expensive plans and pressing enrollees to buy in-house funds, which come with an additional fee that the bank pockets.


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A Wells Fargo spokesperson told the Journal that the company is “making significant progress in our work to identify and fix any issues, make things right, and build a better, stronger company.”

According to the Journal, the practices resulted from managers instituting asset retention goals for employees, which sounds strikingly similar to the practices that led to Wells Fargo employees opening millions of fraudulent checking and savings accounts and credit cards in customers’ names, a scandal uncovered in 2016.

So, what can you do? It’s still early, but if you’re a Wells Fargo client, double check the fine print on your IRA accounts (and any other financial products you have through the bank) to assess the fees and other management costs. And consider switching banks.



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