CIRO deal follows self‑reported fee errors, client payback, and advisor clawbacks
Edward Jones (Canada) has paid more than $4.6m to clients after fee errors in its systems led to years of overcharging in its fee‑based accounts.
On November 18, a Canadian Investment Regulatory Organization (CIRO) hearing panel approved a settlement with Edward Jones over failures in its internal controls and supervision.
The firm admitted it did not maintain adequate systems to ensure client fee agreements were recorded accurately and that clients were charged the correct amounts, breaching CIRO Dealer Member Rules 38.1 and 2500 and Investment Dealer Rule 3900.
The problems centred on two platforms: the Edward Jones Portfolio Program (EJPP), a fee‑based managed account, and the Guided Portfolios Program (GPP), a fee‑based non‑managed account.
While preparing an in‑house platform to replace a third‑party portfolio manager for EJPP, Edward Jones discovered that some eligible EJPP accounts had not received fee reductions and discounts.
Its own data‑submission errors led to overcharges of about $2.5m on roughly 5,400 accounts between 2010 and 2024.
After the firm moved all fee‑based accounts onto its Unified Managed Account Platform (UMAP) in March 2024, it uncovered a second issue in August 2024.
Some eligible GPP accounts did not receive fee reductions because address details were entered inconsistently, preventing the system from grouping accounts for breakpoints.
Differences such as “Suite xx” versus “Apt xx” for the same address broke the price‑grouping logic.
This affected about 4,700 non‑managed accounts between August 2019 and August 2024, leading to around $1.08m in extra fees.
In total, approximately 10,231 accounts were overcharged about $3.64m between September 2010 and August 2024, with most of the impact from 2019 onward.
Edward Jones has paid $4,646,482.46 in remediation, including interest and opportunity cost.
It credited 7,852 open accounts with $3,375,485.85, credited 1,205 closed accounts that had other suitable accounts with $810,854.29, and mailed cheques totalling $460,142.32 to 1,174 clients with no accounts left to credit.
The firm donated $12,194.52 in residual amounts under $10 per account to a registered charity and said it would not claim any tax benefit.
It also clawed back $497,673.92 from 276 financial advisors to remove their share of the overcharged fee revenue.
A data and analytics consultant reviewed the internal investigation and confirmed that the firm’s methodologies and calculations were correct.
No further fee or discount issues have been reported.
The settlement notes that Edward Jones’ compliance failure was inadvertent, that there is no suggestion it deliberately overcharged clients, and that it self‑reported the issues and implemented a remediation plan.
CIRO Enforcement Staff granted a 30 percent reduction in the fine it otherwise would have sought, citing the firm’s “proactive and exceptional cooperation,” remediation measures, client compensation and willingness to resolve the matter early.
Under the settlement, Edward Jones agreed to pay a fine of $122,500 and costs of $5,000.
The settlement agreement has been accepted by a CIRO hearing panel consisting of Chair Robert Armstrong and industry members Dave Persaud and Robert Christianson.
