Two investment advisory firms are settling charges related to compliance failures within their wrap fee programs, the Securities and Exchange Commission announced Thursday. SEC investigations found that St. Petersburg-based Raymond James & Associates and Milwaukee-based Robert W. Baird & Co. failed to establish policies and procedures necessary to determine the amount of commissions their clients were being charged when sub-advisers “traded away” with a broker-dealer outside the wrap fee programs. Without this information, the firms’ financial advisers were unable to provide the magnitude of these costs to clients and did not consider these commissions when determining whether the sub-advisers or the wrap fee programs were suitable for clients, leaving certain clients unaware they were paying additional costs beyond the single wrap fee they paid for bundled investment services.     

Raymond James agreed to pay a $600,000 penalty to settle the charges and Baird agreed to pay a $250,000 penalty. Both firms have offices in Greater Des Moines.