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Raymond James FAs to Refund Some Fees to Retirement Plans, Charity Trusts

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Raymond James (RJF) is asking its advisors to refund some fees associated with mutual fund sales to clients with qualified plans and charitable trusts, the company confirmed Wednesday.

“In the course of operational reviews, Raymond James determined that in certain qualified plan and charitable trust accounts, some clients did not receive all fee waivers for which they were eligible based on investment company-specific offerings as detailed in their prospectuses,” it said in a statement.

The firm recently sent a memo to branch managers and advisors to outline its policies going forward, after recognizing a $10.5 million adjustment associated with fund commissions in its latest quarterly earnings report.

“Significantly less than 1% of client accounts are impacted, and the median rebate is expected to be approximately $200,” according to the company.

“Raymond James studied accounts from the past five years and is now working with financial advisors to ensure fees are rebated in a fair and reasonable manner to affected clients along with interest,” it explained.

Effective Jan. 28, Raymond James says, it will add “additional language … [to its] mutual fund B and C share policies regarding the use of appropriate sales charge waivers for eligible clients, including qualified plans and charitable trusts.”

The new language states, “When making mutual fund purchases in qualified retirement plan accounts and charitable trusts you should determine whether a load waived A-share or retirement share is available to the client. Generally, when a load waived A-share or retirement share is available to the client, it should be purchased.”

In June, FINRA fined Bank of America Merrill Lynch (BAC) $8 million for failing to waive mutual fund sales charges for certain charities and retirement accounts. It ordered Merrill to pay $24.4 million in restitution to affected customers, which came on top of $64.8 million the firm already repaid investors.

Most mutual funds on the wirehouse’s retail platform offered such waivers to retirement plan accounts and disclosed those waivers in prospectuses.

— Check out FINRA Wallops Merrill for Overbilling Charities, Small Businesses on ThinkAdvisor.


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