The regulator brought two separate actions against VALIC. In the first case, the SEC said that for 13 years, beginning in 2006, VALIC failed to tell investors that its parent company gave cash and other financial incentives to the for-profit Teachers Union Entity in exchange for referring teachers to its products and services. In the second case, VFA breached its fiduciary duty by not disclosing fees generated from advisory client mutual funds, which were generally more expensive than other funds, according to the SEC.
“Teachers need and deserve our attention, and we are dedicated to ensuring they receive all of the information they are entitled to when making decisions about their financial futures,” SEC chairman Jay Clayton said in a statement, as reported by Financial Advisor. “Too often educators are targeted with misconduct related to their investments. Our nation’s educators, and our Main Street investors more generally, are entitled to full and accurate information about the incentives and conflicts affecting their financial advisors.”