is working on making up for some missed mutual fund fee waivers.
In the St. Petersburg, Florida-based broker-dealer's fiscal Q1 2015 earnings release
on January 21, RayJay hinted at a "one-time mutual fund commission adjustment." In an earnings call with analysts the next morning (transcribed by SeekingAlpha
), RayJay CEO Paul Reilly
and chief financial officer Jeff Julien
addressed what Reilly called "the $10.5 million kind of mutual fund adjustment".
, the Wall Street Journal
, and WealthManagement.com
reported on the adjustment.
In the earnings release, RayJay noted that "the sequential decline in securities commission and fees" in the Private Client Group was mostly thanks to that adjustment. RayJay's securities commissions and fees fell a little over $6 million in fiscal Q1 2015 (as compared with fiscal Q4 2014). On the call Reilly described the adjustment as "a very small part" of the B-D's commissions. In response to a question from KBW analyst Joel Jeffrey
, Julien confirmed that the adjustment "has to do with which share class of mutual funds were used for certain accounts."
In an emailed statement to MFWire
, RayJay spokeswoman Katy Barrett confirmed that "significantly less than 1 percent of client accounts are impacted and the median rebate is expected to be approximately $200."
"In the course of operational reviews, Raymond James determined that in certain qualified plan and charitable trust accounts, some clients did not receive all fee-waivers for which they were eligible based on investment company-specific offerings as detailed in their prospectuses," Barrett states. "Raymond James studied accounts from the past five years and is now working with financial advisors to ensure fees are rebated in a fair and reasonable manner to affected clients along with interest."
"While we recognize this issue has impacted others in the industry, the firm has always been committed to doing the right thing for clients and is therefore taking this proactive step," Barrett adds. "Internal controls have been augmented and refined with the goal of ensuring appropriate allowances going forward."
Steve Hollister, director of public communications for the B-D, declined to comment on exactly how many advisors had affected clients, on how long the rebating will take, and on how many mutual funds and mutual fund families were involved in the adjustments.
Neil Anderson, Managing Editor
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