Thrivent Takes Reg BI Hit Over Outdated Share Class Calculator
“Until July 2022, Thrivent failed to update its calculator to account for these expense structure changes implemented in 2020, and as a result, recommended Class A shares of the Nebraska and Illinois 529 Savings Plans to its customers,” according to the order.
Thrivent did not review or update the information in its 529 College Savings Plan share class calculator related to the reduction in expense ratios for Class C shares in the Illinois 529 Savings Plan and the Nebraska 529 Savings Plan, the order states.
“As a result, the calculator continued to indicate that Class A mutual fund shares were less expensive than Class C mutual fund shares for certain of Thrivent’s retail customers,” according to the order.
As a result of this failure to understand the difference in costs of the Class A and Class C shares, Thrivent and its registered reps “failed to exercise reasonable diligence, care, and skill when recommending investments in the Nebraska 529 Savings Plan and the Illinois 529 Savings Plan to retail customers,” the SEC said.
Thrivent also failed to establish, maintain and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI, and to meet the rule’s care and compliance obligations.
By failing to comply with Reg BI’s component obligations, Thrivent willfully violated Reg BI’s General Obligation found in Rule 15l1(a)(1) under the Exchange Act, the SEC said.
