Seventy-nine investment firms have agreed to return more than $125 million to investors for failing to report conflicts of interest in the sale of mutual funds, the Securities and Exchange Commission announced Monday.

The firms, which include some of the largest in the nation, agreed to the settlement without admitting or denying guilt. The settlement was the result of a SEC effort to get advisors to self-report conflicts of interest. Most of the money will go to retail investors, the SEC said.

Among the firms that were charged with the reporting failures and which were part of the agreement were LPL Financial, Raymond James, Wells Fargo, Ameritas, Deutsche Bank and Oppenheimer.

The settlement is part of the SEC’s Share Class Selection Disclosure Initiative, which the SEC’s Division of Enforcement announced in February 2018 in an effort to identify and correct harm to consumers in the sale of mutual fund shares by investment advisors. The SEC orders affect advisors who directly or indirectly received fees for investments selected for their clients without adequate disclosure. The firms avoid penalties by self reporting and agree to change the practices. 

In the settled cases, the investment advisors failed to adequately disclose conflicts of interest related to the sale of higher-cost mutual fund share classes when a lower-cost share class was available, according to the SEC. “The advisors placed their clients in mutual fund share classes that charged 12b-1 fees – which are recurring fees deducted from the fund’s assets – when lower-cost share classes of the same fund were available to their clients without adequately disclosing that the higher cost share class would be selected,” the SEC said.

“Investment advisors, as fiduciaries, have an obligation to make full and fair disclosure to clients and prospective clients concerning their material conflicts of interest, including conflicts arising from financial incentives, and to act consistently with those disclosures,” the complaint said.

The SEC created the Share Class Selection Disclosure Initiative to address ongoing concerns that, despite numerous regulations requiring advisors to act as fiduciaries for their clients, “investment advisors were not adequately disclosing conflicts of interest related to their mutual fund share class selection practices,” the SEC said. “These disclosure failures caused harm to investors, particularly retail investors, including being deprived of the ability to make informed investment decisions when purchasing higher-cost share classes.”

“The federal securities laws impose a fiduciary duty on investment advisors, which means they must act in their clients’ best interest,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a statement. “An advisor’s failure to disclose these types of financial conflicts of interest harms retail investors by unfairly exposing them to fees that chip away at the value of their investments.”