IBankInvestmentConsultant) FINRA fined Raymond James $17 million for “widespread failures” in the firm’s anti-money laundering compliance program, making it the largest penalty that the regulator has dished out for that type of infraction, a spokeswoman says.
The failures occurred in Raymond James’ employee and independent channels, which were fined $8 million and $9 million respectively. FINRA also fined former Raymond James & Associates compliance officer Linda Busby $25,000 and suspended her for three months.
Raymond James has been a fast-growing firm through recruiting top wirehouse advisers and making key acquisitions, such as brokerage firm Morgan Keagan. The St. Petersburg, Fla-based firm recently reported that it had roughly 6,700 advisers – making it almost as large as UBS.
However, FINRA says the firm’s growth spurt from 2006 to 2014 wasn’t matched by commensurate growth in the firm’s anti-money laundering compliance systems and processes.
The regulator says Raymond James was relying “upon a patchwork of written procedures and systems across different departments to detect suspicious activity,” and that some red flags went unnoticed.
Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement says Raymond James’ missteps are particularly “egregious” because the firm’s independent broker-dealer had been fined for similar issues in 2012.
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Brokerdealer.com blog update profile broker dealer firm, Raymond James Financial Inc, making big moves in the industry as it announced Friday, that it would acquireing The Producers Choice. This move made Friday will help the broker dealer firm gain greater control over the way annuities are wholesaled to advisers. This brokerdealer.com blog update is courtesy of InvestmentNews’ article, “Raymond James bolsters indexed annuities and life wholesaling with acquisition“, by Darla Mercado. With an excerpt from the article below.
Looking to step up its indexed annuities and life wholesaling game, Raymond James Financial Inc. announced Friday it would acquire The Producers Choice, an insurance marketing organization.
The deal is expected to close mid-summer, and Producers Choice will act as part of Raymond James Insurance Group. Sixty Producers Choice employees will join the firm.
The acquisition addresses two major objectives for Raymond James, which has partnered with Producers Choice for nine years: It gives the broker-dealer greater control over the way annuities are wholesaled and marketed to Raymond James’ advisers, and the firm will have the opportunity to work with Producers Choice’s client base of independent insurance agents, broker-dealers and banks.
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BrokerDealer.com blog update profiles the revenue and profit performance of the US Broker-Dealer space as demonstrated by the pricing action in the iShares US Broker-Dealer ETF (NYSE:IAI) when compared to the returns of the S&P 500 (see chart). Below extract is courtesy of coverage from ETFtrends.com.
Independent broker-dealers generated double-digit revenue growth in 2014, and a broker-dealer- related exchange traded fund is outperforming in the financial space so far this year.
BrokerDealer.com database is the global financial industry’s leading source of BrokerDealer information, with detailed information on thousands of BDs in upwards of 30 countries worldwide.
Over the past three months, the iShares US Broker-Dealers ETF (NYSEArca: IAI), which tracks U.S. investment banks, discount brokerages and stock exchanges, has increased 7.8%, compared to the 2.5% gain in the broader Financial Select Sector SPDR (NYSEArca: XLF). Year-to-date, IAI was up 0.7% while XLF dipped 1.5%.
The 25 largest independent broker-dealers generated a 10.3% year-over-year rise in revenue over 2014, reports Bruce Kelly for InvestmentNews.
Top independent broker-dealers include LPL Financial LLC (NYSE: LPLA), which garnered $4.3 billion in revenue, and Raymond James Financial Services (NYSE: RJF), which added $1.6 billion. IAI includes a 3.4% tilt toward LPLA and a 4.7% weight in RJF.
The industry is experiencing an increase in fees. Revenue from investment products and services that charge a fee instead of a commission rose 20% in 2014 among the top 25 independent broker-dealers, mirroring a growing trend in the services industry.
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