Franklin Resources, parent company of the Franklin Templeton family of mutual funds, said it will eliminate one of its funds in the wake of a scandal in which a broker used misleading sales practices.
According to a regulatory filing with the Securities and Exchange Commission, the $690 million in assets in the Templeton Capital Accumulator Fund will be folded into the $21 billion Templeton Growth Fund. The Accumulator fund was offered through contractual plans that required monthly payments for 15 years.
The move comes on the heels of an investigation of the funds primary distributor, First Command Financial Planning, which was slapped with a $12 million fine for misleading members of the military and failing to disclose the true cost of the plans. In some instances, First Command distributed plans charged customers a sales load worth 50% of their investment.
Franklin said in the filing that the Accumulator fund was "unlikely to grow in the future" because Congress is expected to pass legislation banning contractual plans. First Command has since stopped selling new plans, the filing noted.