Articles Tagged with investment adviser

If you’ve looked into hiring an investment adviser or advisory firm to help manage your investments, you may have seen some offer various advisory services bundled together under one comprehensive fee. These types of service fees are called wrap fees and are offered as sponsored packages by many advisory firms.

With wrap fee programs, your advisor or firm serves as the “sponsor” for the program; essentially the liaison between you and your service offerings. Typically, the fee for these types of programs is determined by the overall value of your investment account. While it may seem easy enough on your end to just pay one flat fee for a bundling of advisory services, there are things you need to watch for when considering wrap fee programs.

Understanding Wrap Fees

Raymond James & Associates along with a Milwaukee-based investment firm, Robert W. Baird & Co. reached a settlement over penalties regarding wrap fee compliance with the Securities and Exchange Commission (SEC) last week.

The SEC had charged the long established St. Petersburg, FL-based investment firm with violating Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 by failing to comply with stated regulations concerning wrap fees. Raymond James agreed to pay $600,000 in penalties following the settlement, in accordance with SEC orders.

The SEC’s investigation found that Raymond James had failed to establish policies and procedures regarding what commissions are charged to clients when sub-adviser trade their investments with broker-dealers outside wrap fee programs. Wrap fees are comprehensive, straight-forward charges levied by an adviser to a client in exchange for bundled investment services.

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