A Raymond James Update

You may have heard that Raymond James was recently fined $17 million by FINRA (the Financial Industry Regulatory Authority) for lapses in its anti-money laundering (AML) processes occurring in 2011-2014. These processes did not deal with cybersecurity or the security of customer accounts. Yet, AML processes are important in helping report illegal flow of funds associated with terrorism or drug activity.

Since 2014, Raymond James has already significantly enhanced its processes and personnel in this area, including implementing the following:

  • Hiring a new chief AML officer, who has more than a decade of experience in this area and who has already made a meaningful impact.

  • Increased AML dedicated staff by greater than 50 associates.

  • Expanded training for all firm associates on AML issues.

  • Integrating leading technology solutions to increase monitoring capabilities.

  • Adding additional internal and independent testing.

To provide context, while this fine is significant, it is not the largest of its sort within the AML area. For example, another firm was recently fined $20 million. Raymond James is large enough to absorb this fine.

You may recall that Laurel Wealth Planning is completely independent of Raymond James. We have the freedom to offer our clients account services through many different venues, and annually evaluate the use of the Raymond James “platform” vs. others. In this analysis, we take into account the following considerations for our clients:

  • Breadth and depth of investment and financial offerings.

  • Security protections, including cybersecurity.

  • Value and costs of services provided.

  • User-friendliness.

  • Quality of investment and financial planning research.

To date, we believe that Raymond James offers our clients a compelling offering. But, of course, it is important that Raymond James comply with all regulations. We will be monitoring this situation closely. Just last week, I spoke with Raymond James’ head of compliance who provided me some of the specific information offered above. In addition, during myrecent attendance at the Baron’s Top Independent Women Advisors Summit, I connected with my colleagues, as I regularly do, on the various platforms they use (although our formal evaluation of platforms goes much deeper than that).

We will continue to provide you updates as appropriate or requested. Please do let me know all questions.