1. News
  2. /
  3. Business

Raymond James to pay $8 million for excessive fees on college savings plans

Merrill Lynch agreed to pay $4 million.

If you have a college savings plan with Raymond James Financial, you might be getting some money back.

The firm has agreed to pay $8 million in restitution to customers for excessive costs related to its 529 savings plans, according to the Financial Industry Regulatory Authority. The firm failed to “reasonably supervise” the plans, which resulted in clients paying higher fees than they should have.

Raymond James Financial Services agreed to pay $4.2 million. Raymond James & Associates will dole out more than $3.8 million, the regulatory agency said. Both are subsidiaries of St. Petersburg’s Raymond James Financial.

Merrill Lynch will pay $4 million for similar violations.

RELATED: Raymond James poised for Wesley Chapel expansion.

Returning money to harmed investors as quickly as possible should be a priority, said Jessica Hopper, a senior vice president at the Financial Industry Regulatory Authority.

“FINRA member firms must be cognizant of all costs to their customers when recommending a product," she said. “This is particularly important where an unsuitable recommendation may cause customers to incur higher fees year-after-year, especially in the case of young beneficiaries.”

Neither of Raymond James nor Merrill Lynch admitted to any wrongdoing, though they consented to the findings.

Over the last few years, the Financial Industry Regulatory Authority found that some firms failed to adequately supervise what their brokers were recommending to clients, including certain investments in 529 plans. A 529 plan provides tax advantages to encourage saving for future education expenses.

In response, the regulator launched a program earlier this year that encouraged firms to examine their procedures and self-report any potential violations. By doing so, the firms would have to pay back their clients for excessive fees, but they could avoid fines and other penalties.

The allegations against Raymond James pre-date that program, but the Financial Industry Regulatory Authority recognized the firm’s “extraordinary cooperation” in determining the punishment.

Kelly Gonzalez, a spokeswoman with Raymond James, said in a statement that the company spent months cooperating with investigators and has upgraded policies and procedures to address their concerns. The company will credit eligible current and former clients including interest.

“The firm is pleased to have resolved this matter,” Gonzalez said.

This isn’t the first time regulatory agencies have dinged Raymond James in recent years.

In 2015, the Financial Industry Regulatory Authority ordered the company to repay $8.7 million for “unreasonably” relying on financial advisers to waive charges for mutual fund sales for certain charitable and retirement accounts.

The following year, the same regulator levied a $17 million fine against Raymond James, accusing it of failing to prevent money laundering. That was the largest fine the regulator had brought against a single firm for violating money-laundering rules. In the findings, investigators suggested that Raymond James’ commitment to anti-money laundering had not matched its rapid growth between 2006 and 2014, which included acquiring the Morgan Keegan brokerage firm.

Later in 2016, Raymond James agreed to pay $600,000 for failing to disclose the entire cost of what the firm charged clients in commissions, according to the Securities and Exchange Commission.

Raymond James is one of the largest companies headquartered in the Tampa Bay area. Last year, it had $7.2 billion in revenues and 13,900 employees, about 5,000 locally.