Raymond James Fined, Drops Fee-Based Brokerage—Will Others Follow?

Published Friday, April 29, 2005

In the first settlement of its kind, the NASD hit Raymond James with a $750,000 fine Wednesday for pushing fee-based brokerage accounts on the wrong kinds of clients. The NASD said Raymond James Financial is in the process of dissolving its fee-based brokerage business, a pricing plan that gave clients the option of paying a flat annual fee for a year’s worth of trades, rather than paying commissions on each transaction. The problem with the Raymond James fee-based Passport Brokerage and Ambassador programs, which together held $5.5 billion in assets at year-end 2004, according to the NASD, was that it was sold to clients who did not trade enough to justify the annual fees, which tend to range from 1.1% to 1.5%. The ruling was the result of an ongoing NASD investigation into fee-based brokerage accounts.

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