Raymond James to pay SEC $ 15 million for wrongful charges
The Securities and Exchange Commission on Tuesday issued a settled order against three Raymond James entities for improperly charging advisory fees on inactive retail client accounts and charging excess commissions for brokerage clients’ investments in certain trusts unit placement, or ITU.
The SEC order finds that Raymond James & Associates and Raymond James Financial Services Advisors have failed to consistently perform the promised ongoing reviews of advisory accounts that have had no trading activity for at least a year.
According to to order, because the Raymond James units did not perform the reviews properly, they were unable to determine whether the client’s fee-based advisory account was appropriate.
The units named in the complaint are Raymond James & Associates (RJA), Raymond James Financial Services (RJFS) and Raymond James Financial Services Advisors (RJFSA).
As stated in their Form ADV, RJA and RJFSA – the consulting firms – “failed to conduct the promised suitability reviews for certain consulting accounts, did not adopt policies and procedures reasonably designed to prevent violations regarding the ‘Adequacy of paid advisory accounts, and overvalued some assets, which resulted in the billing of excessive advisory fees,’ the complaint states.
RJA and RJFS did not have a reasonable basis to recommend certain open-ended investment trust transactions to brokerage clients, the complaint states, “and did not disclose the conflict of interest associated with obtaining greater compensation when recommending certain securities without providing applicable discounts on the sales charge to brokerage clients.