Raymond James to Pay $15M to SEC for Improper Charges

Raymond James’ central campus in Saint Petersburg, Florida.

The Securities and Exchange Commission on Tuesday instituted a settled order against three Raymond James entities for improperly charging advisory fees on inactive retail client accounts and charging excess commissions for brokerage customer investments in certain unit investment trusts, or UITs.

The SEC order finds that Raymond James & Associates and Raymond James Financial Services Advisors failed to consistently perform promised ongoing reviews of advisory accounts that had no trading activity for at least one year.

According to the order, because the Raymond James units failed to conduct the reviews properly, they failed to determine whether the client’s fee-based advisory account was suitable.

The units named in the complaint are Raymond James & Associates (RJA), Raymond James Financial Services (RJFS), and Raymond James Financial Services Advisors (RJFSA).

As set out in their Form ADV, RJA and RJFSA — the advisory firms — “failed to conduct promised suitability reviews for certain advisory accounts, did not adopt policies and procedures reasonably designed to prevent violations concerning the suitability of fee-based advisory accounts, and overvalued certain assets that resulted in charging excess advisory fees,” the complaint states.

RJA and RJFS failed to have a reasonable basis for recommending certain unit investment trust transactions to brokerage customers, the complaint states, “and failed to disclose the conflict of interest associated with earning greater compensation when recommending certain securities without providing applicable sales-load discounts to brokerage customers.”