Wells Fargo Advisors and its independent FiNet unit have agreed to a combined $1 million Finra fine for allegedly failing to adequately supervise advisors’ use of consolidated statements.
 
The settlement, agreed to by the parties last week, was released by Finra on Monday.
 
Consolidated statements are typically used to track all of a client’s assets and liabilities, including those held outside the brokerage firm. In many cases, advisors have to manually input assets held elsewhere.
 
Finra alleged that between June 2009 and June 2015, the firms had no systems in place to review consolidated statements produced by advisors, including information about customer assets held away.
 
Under Finra rules, brokerage firms must ensure that registered reps take “reasonable steps” to ensure that consolidated statements have accurate values, the settlement says. But Wells Fargo Advisors and FiNet reviewed only the cover sheets, customer contact information and the required disclosures on the reports.
 
During the period under review, advisors at the firms generated more than 5,000,000 consolidated reports, although not all were sent to clients, Finra said.
 
“As part of this settlement, Wells Fargo Advisors has implemented and continues to implement new supervisory procedures and guidance with respect to supervising external assets and consolidated reports,” said spokeswoman Helen Bow in an email.