The SEC order is split in two parts.
Firstly, Raymond James & Associates and Raymond James Financial Services Advisors failed to review their retail clients’ accounts.
As a result, customers with inactive accounts – those without any trading activity for at least a year – ended up paying more fees than they should have.
Additionally, the two firms failed to determine whether a fee-based advisory account was still the best option for their clients, and applied higher charges than necessary.
Secondly, the SEC found that Raymond James & Associates and Raymond James Financial Services recommended their brokerage customers sell their unit investment trusts (UITs) before their maturity and buy different ones, failing to determine whether that was the best option for them.
This resulted in customers paying higher sales commissions than what they would have been charged if they had waited until maturity and then purchased another UIT.
On top of that, the two subsidiaries failed to apply sales discounts available for brokerage customers.
The SEC has charged the three subsidiaries, which have all agreed to settle the matter.
They will pay $12m back, representing the overcharged fees, plus $3m as a civil penalty.
“Investment advisers and broker-dealers have on-going obligations to their clients and customers,” said Dabney O’Riordan, co-chief of the SEC enforcement division’s asset management unit.
“Raymond James’ failures cost their advisory clients and brokerage customers millions that will be repaid as part of this settlement.”