SEC Charges California Advisory Firm AssetMark for Failing to Disclose Multiple Financial Conflicts

The Securities and Exchange Commission today announced that Concord, California-based registered investment adviser AssetMark Inc. has agreed to pay more than $18 million to settle charges related to undisclosed conflicts of interest involving a cash sweep program operated by its affiliated custodian and its receipt of millions of dollars in revenue sharing payments from third-party custodians. According to the SEC’s order, from at least September 2016 to January 2021, AssetMark failed to provide full and fair disclosure of conflicts of interest arising from its affiliate’s cash sweep program, which transferred, or “swept,” clients’ uninvested cash into interest-earning bank accounts. AssetMark did not advise clients that it helped set the fee that its affiliate custodian received for operating the cash sweep program.