From: Matthew Watts [mailto:Matthew.Watts@RaymondJames.com] 

Sent: Tuesday, July 14, 2015 12:21 PM 

To: EBSA, E-ORI - EBSA 

Subject: RIN 1210-AB32 

Ladies and Gentlemen:

Thank you for providing Raymond James with the opportunity to comment on the Department’s

proposed Fiduciary / Conflict of Interest rule. Attached to this email you will find our comment letter, as

well as a copy of our client rights and responsibilities document which we reference in our comment

letter. We look forward to meeting with the Department on July 16, and also would appreciate an

opportunity to testify during the August hearings. Please feel free to reach out to us with any questions.

Please also note that in addition to these soft copies, we have also submitted this information to the

Department in hard copy via express mail. Thank you again.

Sincerely,

Matthew Watts 

Vice President of Administration 

Private Client Group Investment Products & Solutions 

T 727-567-4054 // F 877-872-8932 

880 Carillon Parkway, St. Petersburg, FL 33716

2015 PCG Investment Products Forums Registration Now Open to Advisors! The Forums will be 

held in Tampa (May 11 – 13) and Chicago (Jul 22 – 24). The Forums will focus on real-time 

investment solutions and offer an optional continuing education day. Click HERE to learn more.

Private Client Group Investment Products & Solutions encompasses several Raymond James departments including the Alternative 

Investments Group, the Raymond James Insurance Group, the Options Department, and Mutual Fund Research and Marketing. An investor 

should carefully consider the merits and considerations of any product and thoroughly review the offering documents prior to making a 

purchase. Past performance is no assurance of future results. Information in this message reflects current market conditions and is subject to 

change without notice. It is believed to be reliable, but is not guaranteed for accuracy or completeness. 

Please be advised that this message may contain confidential and/or privileged information. If you are not the intended recipient (or have 

received this message in error) please notify the sender immediately and delete this message, together with any copies, from your system. 

Any unauthorized copying, disclosure or distribution of the material in this message is strictly forbidden.













Spend some time with this comprehensive guide to get the most 

out of your experience with Raymond James and your advisor, 

including services available and our keys to better investing.

YOUR RIGHTS AND RESPONSIBILITIES 

AS A RAYMOND JAMES CLIENT
IMPORTANT INVESTOR EDUCATION

CONTENTS 

A RAYMOND JAMES CLIENT’S BILL OF RIGHTS 2

A RAYMOND JAMES CLIENT’S RESPONSIBILITIES 3

IMPORTANT INVESTOR EDUCATION 4

20 KEYS TO BETTER INVESTING 5

UNDERSTANDING INVESTMENT RISK 7

REDUCING RISK THROUGH DIVERSIFICATION 10

STABILITY REQUIREMENTS 10

INVESTMENT PRODUCTS: COSTS, 

COMPENSATION AND OTHER CONSIDERATIONS 11

INDIRECT COMPENSATION FOR ORDER FLOW 13

MUTUAL FUNDS 13

ANNUITIES 18

EQUITY RESEARCH REPORTS 21

KNOWING WHAT YOU ARE READING WHEN YOU READ A PROSPECTUS 24

COMMUNICATIONS WITH YOUR FINANCIAL ADVISOR AND OUR FIRM 25

ACCOUNT PROTECTION 28

TRADING 28

SWEEPS (TRANSFERS) TO AND FROM INCOME-PRODUCING ACCOUNTS 29

RAYMOND JAMES BANK DEPOSIT PROGRAM 30

CLIENT INTEREST PROGRAM (CIP) 30

EAGLE CLASS OF JPMORGAN MONEY MARKET MUTUAL FUNDS 30

RAYMOND JAMES BANK WITH CHECK WRITING 32

RAYMOND JAMES BANK DEPOSIT PROGRAM DISCLOSURES 32

SERVICING YOUR ACCOUNTS 36

TRANSFERRING YOUR ACCOUNT TO RAYMOND JAMES 36 

THE BENEFITS OF STREET NAME ACCOUNTS 36

CREDITING CHECKS TO AN ACCOUNT 36

SPEEDY ACCESS TO YOUR DIVIDENDS AND INTEREST PAYMENTS 37

YOUR RIGHTS AS A SHAREHOLDER 37

THE PITFALL OF PENNY STOCKS 37

UNDERSTANDING THE OTC MARKET 37

CONFLICT RESOLUTION 38

THE PATRIOT ACT 38

ENSURE YOUR ACCOUNT INFORMATION IS UP-TO-DATE 38

STATEMENT OF CREDIT DISCLOSURE 38
2

IMPORTANT INVESTOR EDUCATION

A RAYMOND JAMES CLIENT’S BILL OF RIGHTS

1. You have the right to courteous service – from your financial advisor and all other associates of our firm.

2. You have the right to select and work with a trustworthy, independent financial advisor who is professionally competent, 

personally dedicated, and who communicates with you on a regular basis about your portfolio. You may request 

information about your advisor’s work history and background, and you may contact your state or provincial securities 

agency for verification. 

3. You have the right to expect financial and investment recommendations based solely upon your unique needs and goals, 

consistent with the objective of enhancing your financial well-being. While the performance of investments may not 

meet your expectations and markets can underperform their historical averages, recommendations should be based 

upon the goal of attaining superior performance in light of the facts known at the time of investment.

4. You have the right to open, consistent communication and to have information presented in clear and understandable 

terms.

5. You have the right to reasonable, achievable projections of results, understanding that many unforeseen factors can 

frustrate expectations and result in losses, particularly in the short term.

6. You have the right to reasonable investment alternatives selected based on your individual objectives and presented 

with full disclosure of risks and benefits. Your trade confirmations will reflect any time that you initiate an investment 

decision without the benefit of or against the advice of your financial advisor, or if your account is managed by a 

professional money manager.

7. You have the right to know all costs and commissions associated with an investment, as well as fees our firm charges 

for services. An exception applies for securities traded in a principal capacity, where commissions and trading profits 

are included in the purchase price. For the latest listing of our fees and charges, visit raymondjames.com/services_and_

charges.htm or ask your financial advisor.

8. You have the right to have transactions executed in a timely fashion, at the best available price and with prompt 

reporting. Your statements should reflect all positions and activity in your account. With the exception of infrequently 

traded securities, all positions should be priced as accurately as possible. Fixed income prices are often estimated 

using general formulas.

9. You have the right to have any errors corrected fully and any complaints addressed promptly. If a problem is not 

resolved to your satisfaction, you may contact the manager of your local office and/or Raymond James’ international 

headquarters.

10. You have the right to strict confidentiality, complete discretion and full protection of your personal and financial 

information. We do not sell your information to anyone. Raymond James only provides information to external 

organizations when required by law or regulation or when necessary to provide the services you have requested. 

Unless you specify otherwise, Raymond James’ subsidiaries may share your information within the Raymond James 

organization to provide informed, efficient service.
3

IMPORTANT INVESTOR EDUCATION

A RAYMOND JAMES CLIENT’S RESPONSIBILITIES

1. You have the responsibility to share your current financial situation, needs and objectives, as well as changes in your 

financial and personal circumstances, with your financial advisor so that appropriate recommendations can be made. 

You should make time to meet with your financial advisor on a regular basis, at least annually, to review and revise your 

financial plan and portfolio as needed based upon changing circumstances.

2. You have the responsibility to understand and acknowledge that all investments have some degree of risk and it is 

possible to lose money on any investment.

3. You have the responsibility to review all statements and trade confirmations in their entirety, ensuring that your 

instructions were carried out as expected and reporting any errors to your financial advisor or Raymond James. Ask for 

clarification of anything you do not understand.

4. You have the responsibility to read prospectuses and offering documents fully, ensuring that you understand all risks 

and costs and that you ask for any necessary clarification prior to making a purchase. If you do not receive an offering 

document or prospectus, you should request one.

5. You have the responsibility to make timely payment for the purchase of securities. Generally, you should ensure that cash 

or available margin buying power is available in your accounts by settlement date, which for most securities transactions 

is three business days after the trade was executed. An advance deposit of funds may be required before trading for new 

clients, purchases of low-priced or volatile securities, or unusually large transactions to ensure timely payment.

6. You have the responsibility to understand that if you have chosen to participate in an asset-based fee relationship – in 

which you pay an annual fee for the advice and services provided by your financial advisor, independent of the level of 

trading activity – this fee may be higher or lower than the cost of a commission alternative. You should be satisfied with 

the total of all fees and commissions given the services provided.

7. You have the responsibility to seek the advice of a tax professional, CPA or attorney, as appropriate. Financial and 

investment planning inherently involve potential tax and legal implications, which financial advisors are generally 

familiar with. However, Raymond James and its financial advisors do not practice as lawyers or CPAs and cannot give 

specific legal or tax advice.

8. You have the responsibility to protect your Raymond James information, including statements, login names and account 

passwords, in order to ensure the security of your financial and personal data. Raymond James associates will not ask you 

for your password, and you should not give this information to anyone you do not want to have access to your account.

9. You have the responsibility to only accept payments from and make payments to Raymond James when dealing with 

representatives of the firm. Payment from any other business name or representative, including cash, should be reported 

immediately, and you should not make checks payable to a financial advisor or any other entity. You should also never 

borrow from or lend money to a representative of a financial institution.

10. You have the responsibility to maintain accessible records of financial plans, including the investments you’ve made 

and the rationale for purchase, to a family member or other trusted individual. We recommend you prepare an annual 

balance sheet detailing all of your investments, including their locations.
4

IMPORTANT INVESTOR EDUCATION

INTRODUCTION

Investing is serious business. All investments involve risks 

that can result in losses even though the goal is to preserve 

and increase wealth. We believe you should have every 

opportunity to understand the risks, rewards and implications of the investment alternatives and services, as well 

as financial planning and investment strategies, offered for 

your consideration. With that in mind, we are providing you 

this explanation of considerations you should be aware of as 

an investor. 

We encourage you to invest a little time now to read this 

important document before proceeding further with your 

financial planning and investment program. Even if you 

have read a prior version, you should read this revised edition as it is revised periodically to keep pace with modifications pertaining to industry regulations, as well as changes 

to the many investment alternatives and financial services 

available. For the most up-to-date version of this document, 

please visit raymondjames.com/billofrights or ask your 

financial advisor.

Our investment philosophy goes beyond the primary objectives of preservation of principal, generation of income 

and capital appreciation. While there is no doubt these are 

important objectives for you, a personalized investment plan 

requires even more – the peace of mind resulting from exemplary service, education and appropriate risk management.

Therefore, all Raymond James financial advisors, including the one you have selected, are professionals supported 

by experienced associates who handle the execution and 

processing of transactions, a state-of-the-art computer 

system to generate comprehensive account statements, 

online client services to give you convenient access to your 

accounts, and one of the most highly regarded research 

groups in North America to review investment alternatives 

before they are offered to you.

While having all of this support available to you is reassuring, we believe it is critically important that you first 

understand the investment process and your rights and 

obligations as an investor so that you may better utilize 

our support.

We believe this document is one of the most complete 

descriptions of the practical considerations dealing with 

investments. It also describes many of the policies and procedures employed by Raymond James. Furthermore, the “20 

Keys to Better Investing” are useful in dealing with other 

firms. You should retain it for reference purposes after reading it upon receipt. Our hope is that you will become more 

knowledgeable as a result of reading this material and, as 

an informed investor, you will make better financial planning and investment decisions with assistance from your 

Raymond James financial advisor.

Since we are committed to enhancing our service, we 

solicit your suggestions for improvements. Please feel free 

to offer these to your financial advisor or to Client Services 

at 800-647-SERV (7378).

We appreciate and thank you for your business.
5

IMPORTANT INVESTOR EDUCATION

20 KEYS TO BETTER INVESTING

One of the fundamental building blocks requisite to the 

attainment of an individual’s financial objectives is the 

establishment of a long-term relationship with his or her 

financial advisor. A financial advisor must be educated in 

the techniques of financial planning, possess an understanding of all the investment alternatives available in 

the marketplace, and exhibit unquestionable honesty and 

concern for his or her client. Raymond James makes every 

effort to attract and educate financial advisors who fulfill 

these criteria. Once you have selected a financial advisor 

who possesses these attributes and with whom you are 

comfortable, it is necessary to build that long-term relationship. Moreover, there are a number of simple rules of 

investing that our chairman of the board, Thomas A. James, 

believes should be followed throughout the relationship:

1. Communicate frequently and frankly with your financial 

advisor, particularly about your concerns with respect to 

any financial planning strategy, investment and/or compensation. An honest, sincere relationship is fundamental to 

the success of the client’s efforts.

2. Work with a trained financial advisor to develop an 

agreed-to financial plan that will guide investment decisions. Review it at least annually and revise as needed.

3. Don’t reach for unrealistically high returns. Keep expectations realistic. Any investment which is represented to 

provide significantly higher-than-market-rate returns generally is not legitimate. Investments such as prime bank 

notes, special bonds or accounts that promise double-digit 

interest, are just a few examples of the ploys to part you 

from your money. If an investment sounds too good to be 

true, it probably is and may not perform up to expectations. 

In periods of low interest rates, higher investment returns 

imply risk to the value of the principal. Be skeptical about 

“guarantees.” Financial advisors cannot share losses or 

gains in a client’s account.

4. While a prospectus or other investment literature can be 

intimidating, investing hard-earned dollars is a serious task 

and requires an investor’s attention and involvement. With 

the assistance of a financial advisor, read the literature and 

strive to understand the investment’s fundamentals, risks, 

potential rewards and costs. For example, different features 

and commission rates may apply to each mutual fund or annuity among the thousands available in the market.

5. Always strive for diversity among investments, styles and 

portfolio managers, even when investments appear to offer 

limited risk. Due consideration by a client and an explanation 

of the incremental costs of diversification by the financial 

advisor are integral to this decision-making process.

6. Establish cash distribution rate objectives on investments that are lower than actual earnings or yields. Since 

mutual funds, master limited partnerships (MLPs) and certain other investments often distribute more than earnings, 

clients should utilize a withdrawal plan that results in a 

growing principal account balance over the long run to compensate for inflation and growing cash flow requirements 

in the future.

7. An asset allocation model should be designed for a client, and a client and his or her financial advisor should meet 

regularly to determine if the client’s changing economic circumstances require revisions to his or her portfolio. The 

asset allocation model should err on the conservative side, 

but almost always include some quality equity exposure. 

Inflation requires a growing principal balance to maintain 

the client’s standard of living. The financial advisor should 

prepare meeting notes for the client’s records.

8. All, or a substantial majority, of equity investments should 

be in professionally managed portfolios or in a diversified group of high-quality stocks. While emerging growth 

stocks and small-capitalization stocks have a place in every 

wealthy investor’s portfolio, and should make up a modest 
6

IMPORTANT INVESTOR EDUCATION

proportion of almost everyone’s equity portfolio (with the 

exception of a retired person of insubstantial means), the 

vast majority of dollars should be in high-quality, recognizable names with favorable prospects. It is often useful to 

establish a separate small-cap or risk-oriented portfolio to 

ensure that a client and financial advisor have the discipline 

to understand and limit the risk.

9. Part of an equity investment portfolio should be invested 

in foreign equities through professionally managed international mutual funds and/or asset management portfolios. 

There are additional risks associated with international 

investing.

10. Asset allocation models for high-net-worth clients should 

include some real estate investments. Real estate investment 

trusts currently provide the most convenient vehicle.

11. As the name implies, income investments should always 

be purchased for the income they provide, but also for 

capital preservation. They should always be high investment grade unless a client is willing to assume incremental 

risk in exchange for the growth potential offered by incomeproducing equity investments such as dividend-paying 

stocks, bond funds or closed-end funds. Even then, the 

incremental yield may not be worth the risk.

12. Use margin in the Raymond James Ready Access 

Account (margin) sparingly for investment purposes. 

Leverage increases risk. However, if borrowing money for 

non-investment purposes, consider a Ready Access loan 

as it is often the lowest-cost alternative. Maintain the same 

discipline in paying down a Ready Access loan that you 

would with any other loan.

13. Treat IRAs and other qualified plan investments as very 

serious money and let the magic of compounding work with 

professionally managed stocks and bonds. Generally, do 

not fund qualified plans with partnerships or other complex 

investments because they can lead to reporting, valuation 

and tax problems. Before opening an IRA or qualified plan 

account, clients should carefully review the IRA Agreement and Disclosure document or qualified plan trust 

document provided by their financial advisor and consult 

with him or her regarding any questions or concerns they 

may have.

14. Don’t try to “time the market.” Be a long-term investor, 

and practice patience and adherence to an asset allocation 

model. Avoid the latest funds. Dollar-cost-average where 

possible – continue to add to equity investments, if able, on 

a regular basis. Studies demonstrate that timing decisions 

need to be “right” over 70% of the time to add value, and 

moving to cash increases the risk that you may miss market 

rallies, which often run in short bursts.

15. Be both receptive to and skeptical about new ideas. 

Evaluate them carefully and use them in moderation.

16. Generally, avoid giving investment discretion to anyone 

other than financial advisors, professional managers or 

professional fiduciaries who have been approved by a reputable firm.

17. Everyone makes errors in investment selections. Learn 

to recognize an error and take losses early. It is generally 

far less painful to recognize a small loss than to ride it to 

zero. Do not make the mistake of waiting to recover the 

original cost.

18. Do not panic out of the market when investments have 

declined in value because of a general market decline. That 

is often the most opportune time to increase investment 

positions, as long as the fundamentals of the selections 

remain positive.

19. It is better to err on the side of conservatism than to be 

too aggressive. 
7

IMPORTANT INVESTOR EDUCATION

20. Never purchase any securities outside the financial 

advisor’s broker/dealer and immediately ask the 

firm about any purchase you have made not reflected on 

your client statement at the broker/dealer.

If you follow these common sense rules of investing, 

your results should have a higher probability of success. 

Although none of these “rules” work all of the time and 

there are no “guarantees” in the world of investments, 

these disciplines have produced excellent results over the 

long term. A disciplined approach to investing, assisted 

by a financial advisor with whom you have established 

a good relationship, will better enable you to attain your 

financial objectives.

UNDERSTANDING INVESTMENT RISK

Securities investments, including mutual funds and even 

government bonds, are not insured by the federal government against market loss.

All investments contain some measure of risk, from the high 

risks attendant to investing in small, unproven companies to 

the risks of price fluctuations based on interest rate changes 

in investments issued by the U.S. Treasury or banks. There 

are fundamental economic risks associated with the operation of any individual business, including maintenance of 

product quality, success in research and development to 

assure a flow of new commercial products, competition, and 

adequate cost control, to name just a few. Some of these 

risks may transcend the individual company and relate to the 

health of the industry and/or the U.S. and world economies. 

Furthermore, reasonable investment objectives can be frustrated by factors outside of anyone’s control.

Typically, low-priced stocks and newly issued securities, 

as well as securities of historically unprofitable companies, are considered speculative in nature, involve more 

than normal risk and can experience volatile price behavior. 

For example, most stocks in new industries are relatively 

unproven companies whose valuations can materially 

exceed those based on traditional business methods. Call 

options are similarly speculative as the price declines over 

the option’s life unless the underlying stock price moves up 

quickly. Although prospective investment returns may be 

higher than normal, only investors capable of sustaining the 

complete loss of their investments should purchase these 

securities. 

In addition to the above fundamental factors, equity prices 

are affected by investors’ perceptions of how the company, 

the industry, and/or the U.S. and world economies will 

perform. In any short period of time, perceptions can vary 

materially from reality. As a result, stock prices of companies with excellent results and fundamentals can decrease 

materially for substantial periods of time (e.g., in a bear 

market). In short, investments are subject to the impressions of others. Generally, this type of risk is mitigated by the 

length of time the security is held, as the stocks of companies exhibiting good long-term economic results generally 

perform well over an extended period of time. On the other 

hand, stocks driven by “irrational exuberance” (e.g., the 

“dot-coms”) can lose 100% of their values.

The third principal risk involves the concept of duration. 

While holding fixed interest rate obligations until maturity 

provides return of principal, these investments vary in price 

as interest rates change during the life of the bond. Longerterm certificates of deposit are subject to the same risk. As 

interest rates rise, fixed income securities’ prices generally fall to provide the market rate of return. Conversely, 

falling rates imply higher prices. While there are generally 

secondary markets for longer-term bonds and CDs, those 

markets can be illiquid and involve high spreads between 

the bid and ask prices, reflecting the infrequency of trading 

and the attendant risks to a market maker of finding a buyer 

at the appropriate price. Because of infrequent transactions 
8

IMPORTANT INVESTOR EDUCATION

in fixed income securities, many of the valuations on client 

account statements could be the last (“old”) trade prices, 

costs or formulaic estimates of values – not bid prices – and 

may not reflect what a client might receive at the time of 

sale. Always consult with a financial advisor for a current 

bid or ask quote before initiating a transaction. Fundamental factors that might influence the issuer’s ability to 

pay also affect prices. If the debt instrument is subject to 

changes in interest rates by its terms, that can also negatively impact market price.

All but the most sophisticated and affluent investors 

should avoid purchasing significant amounts of fixed income securities that are unrated or rated below “BBB,” including high-yield (below investment grade) mutual funds. 

Although yields are normally higher to reflect the increased 

risk, issuers may fail to pay interest or be unable to make 

required principal payments, resulting in a loss of capital or a delay in the receipt of funds. Generally, investors 

should limit purchases of such securities, if any, to a modest amount of their portfolios and consider them equity alternatives. Similarly, many closed-end funds utilize lowerquality securities with leverage to enhance yield, which can 

generate principal losses, particularly in periods of rising 

interest rates.

Limited partnerships are generally illiquid and should not 

be purchased unless an investor is prepared to own them 

until the time the partnerships are scheduled to liquidate. 

Moreover, these investments generally are riskier than 

other securities because they often involve the direct ownership of units subject to commodity price risks, leverage 

risks and/or risks related to the direct ownership of operating businesses. However, since these investments are 

an excellent method of owning real estate, equipment and 

other tangible assets, as well as investing in venture capital, it may be prudent to allocate part of a portfolio to this 

category after weighing the above considerations, particularly when the economic outlook is inflationary.

The fourth investment risk relates to the type of security 

and its priority in the order of liquidation. Equity investments (i.e., common stocks) are most susceptible to the 

risk of loss if a company’s fortunes deteriorate. On the 

other hand, a collateralized bond (e.g., debt secured by an 

airplane owned by an insolvent airline) can still be “money 

good,” even in bankruptcy, provided the collateral value exceeds the debt.

A fifth investment risk relates to the use of margin (i.e., 

borrowed funds to finance all or part of the purchase of an 

investment). The following provides some basic facts about 

purchasing securities on margin and discusses the risks involved with trading securities in a margin account:

Before trading stocks in a margin account, clients should 

carefully review the margin agreement provided by their 

financial advisors and consult with them regarding any 

questions or concerns they may have with their margin 

accounts. Please note that margin accounts are not appropriate for all investors.

When purchasing securities, investors may pay for the 

securities in full or may borrow part of the purchase 

price from Raymond James. If the client chooses to 

borrow funds from our firm, he or she will open a margin account with us. The securities purchased are our 

collateral for the loan to the client. If the securities in 

the client’s account decline in value, so does the value 

of the collateral supporting the loan. As a result, Raymond James can take action, such as issuing a margin 

call and/or selling securities in the client’s account, in 

order to maintain the required equity in the account.

The use of margin increases the impact a price decline 

may have on the value of a client’s equity. In fact, a client 

can lose more funds than he or she deposits in the margin account. A decline in the value of securities that are 
9

IMPORTANT INVESTOR EDUCATION

purchased on margin may require the client to provide additional funds to Raymond James to avoid the forced sale 

of those securities or other securities in his or her account.

Raymond James can force the sale of securities in a client’s margin account. If the equity in an account falls below the margin maintenance requirements under the law, 

or Raymond James’s higher “house” requirements, Raymond James can sell the securities in the account to cover the margin deficiency. The client also will be responsible for any shortfall in the account after such a sale.

The firm can sell a client’s securities without contacting the client. Some investors mistakenly believe that 

the firm must contact them for a margin call to be valid 

and that the firm cannot liquidate securities in a client’s 

accounts to meet the call unless it has contacted the investor first. This is not the case. Most firms will attempt 

to notify their clients of margin calls, but they are not 

required to do so. However, even if Raymond James has 

contacted a client and provided a specific date by which 

he or she can meet a margin call, our firm can still take 

necessary steps to protect its financial interests, including immediately selling the securities without notice to 

the client.

Clients are not entitled to choose which securities in 

their margin accounts are liquidated or sold to meet a 

margin call. Because the securities are collateral for the 

margin loan, Raymond James has the right to decide 

which to sell in order to protect its interests.

Raymond James can increase its “house” margin maintenance requirements at any time and is not required to 

provide a client advance written notice. These changes 

in policy often take effect immediately and may result in 

issuance of a margin maintenance call. A client’s failure 

to satisfy the call may cause Raymond James to sell 

securities in his or her account.

Clients are not entitled to an extension of time on a 

margin call. While an extension of time to meet margin 

requirements may be available to clients under certain 

conditions, a client does not have a right to an extension.

Sixth, while it is often appropriate for an investor to incorporate foreign securities in a portfolio, these investments 

can be volatile and are subject to many additional risk factors, 

including currency fluctuations, possible political and economic instability, and different financial accounting standards. Generally, foreign securities are best purchased in a 

professionally managed mutual fund or asset management 

portfolio to achieve broader diversification, or through 

ADRs traded on U.S. securities exchanges. 

Finally, market prices are a function of human emotions 

as well as rationally determined supply and demand. Thus, 

even when the fundamental investment characteristics 

are sound, individual securities or general market prices 

can decline, often for protracted periods of time. Investors 

must have patience and perseverance, as well as the courage, to invest or hold when things might look the bleakest, 

as long as the investment’s fundamentals are intact.

Clients must make the final purchase or sale determination, unless they have established discretionary accounts 

with their financial advisors. While a financial advisor who 

is trained in these financial matters should be relied on for 

advice, on occasion those recommendations will not produce the expected results because of the complex nature 

of the risks described above. Since neither the financial 

advisor nor the securities firm shares directly in the profits 

of successful investments, except possibly those in feebased accounts where the financial advisor’s fee increases 

and decreases proportionately to the value of the account, 

the client necessarily bears the risk of loss from unsuccessful investing. Investing is a serious business, which, 
10

IMPORTANT INVESTOR EDUCATION

while offering prospectively good returns, merits a client’s 

attention to the decision-making process. Investors should 

remember that the higher the potential reward, the greater 

the potential risk of an investment.

REDUCING RISK THROUGH DIVERSIFICATION

Avoid investing a high percentage of assets in one company, 

one sector or one securities classification. The combination 

of concentration and margin is a recipe for potential 

disaster. One way to reduce risk – in fact, we think it is the 

best way – is through asset allocation. Because investments 

can be affected by inflation, cyclical markets, fluctuating 

interest rates, world events, corporate operations, and new 

domestic laws and regulations, investors always face risk. 

By diversifying assets, the risk of any fluctuation adversely 

affecting a diversified portfolio is less than if “all of your 

eggs are in one basket.” However, diversification does not 

ensure a profit or protect against loss.

A client can diversify among different types of securities, 

debt, durations or companies possessing differing 

economics. The process of developing an asset allocation 

model specifically designed to complement each client’s 

financial plan is essential to success in investing. Moreover, 

the model should be updated regularly to accommodate 

changing financial needs and personal circumstances.

Raymond James financial advisors can assist their 

clients in the asset allocation process and can help them 

understand the amount and types of risks inherent in each 

investment, which enables them to position their portfolios 

to work efficiently in ever-changing market conditions.

The first phase of our recommended asset allocation program organizes a client’s investments into four categories: 

equities, fixed income, real estate and other tangibles, and 

cash equivalents. The recommended allocation among the 

classes is based upon the client’s objectives, risk tolerance, time horizon and economic outlook.

When a client’s asset allocation model has been put into 

effect, the program’s second phase is an ongoing periodic 

review of how the portfolio is performing and what changes, if 

any, might be needed in view of changing variable conditions.

Asset allocation models are useful in the evaluation of 

different hypothetical portfolio structures, as well as in the 

analysis of trade-offs between risks and prospective returns 

in the process of selecting an appropriate asset mix.

Thus, while it is a client’s right to expect our firm to use its 

best efforts to recommend investments that will perform 

and are suitable for the client’s financial circumstances, 

it is the client’s responsibility to ensure that his or her 

chosen financial advisor is aware of his or her overall asset 

allocation picture and to make the final purchase and sale 

decisions. In this way, the client can more intelligently 

balance the risks and reap the rewards of his or her 

investment selections.

SUITABILITY REQUIREMENTS

Not every client should own every investment. Because 

certain investments involve greater risk, clients very often 

must have a specific net worth or income before they can 

participate in those investments. The objective is to protect 

the investor as much as possible from the associated risk.

Investment objectives – low, medium or high risk tolerance – 

help to identify the investment goals for each of your accounts as part of a comprehensive financial plan. Your financial advisor will work with you to collect this information 

upon opening each account in order to gain a clear understanding of what your financial goals and needs are. In order 

for your financial advisor to make investment recommendations, he or she must gather certain information related to 

your financial status and investment history to ensure that 

your investments are designed to fit your individual circumstances. All of this information, along with your objectives, 

is compiled when filling out your New Account Form. You 

can find the investment objectives you selected on the front 

page of each of your statements.
11

IMPORTANT INVESTOR EDUCATION

Because your situation may change from time to time, it is 

necessary for you to review your goals with your financial 

advisor on an ongoing basis.

A better understanding of the investment objective definitions below will ensure that you are selecting the appropriate objectives for your unique situation.

CAPITAL PRESERVATION

Clients with this main objective seek to avoid loss of capital, 

even if it means achieving a lower overall long-term return. 

Investments consistent with this objective include traditional CDs, money market funds, insured high-grade municipal 

bonds and certain government bonds. This objective, by the 

nature of the investments, would entail a low risk tolerance.

INCOME

Clients with this primary objective focus on the receipt of 

dividends and interest. Corporate and municipal bonds, preferred securities, utility stocks, options-covered call writing, and fixed-income mutual funds would be investments 

consistent with this objective. Risk tolerance can be low, 

medium or high, dependent on the credit quality and volatility of the securities selected for investment. For older or 

retired clients, the risk tolerance should be considered low, 

except in unusual circumstances.

GROWTH

Clients with this objective seek investments designed to 

appreciate in price over a period of time. Investments in 

this category include equity mutual funds, stocks and other 

types of equity securities. Risk tolerance can be medium or 

high for this objective depending upon the client’s willingness and ability to tolerate losses.

SPECULATION

Clients willing to speculate risk significant loss of capital. 

Investments consistent with this objective include certain 

types of options trading, high-yield bonds and small-cap or 

microcap equities. Speculation entails a high risk tolerance.

INVESTMENT PRODUCTS: COSTS, 

COMPENSATION AND OTHER 

CONSIDERATIONS 

As a securities firm, we are in the financial consulting and 

transaction execution businesses. We are paid in commissions on transactions, fees based on assets and/or hourly 

fees. Generally, commissions on transactions range from 

less than 1% to 7% of the principal involved, depending on 

the type and size of the transaction.

The most common transactions are purchases or sales of 

securities on an agency basis in which the securities firm 

is utilized as an “agent” for the client. Except for very small 

transactions, agency stock and bond trades have commissions that generally range from .75% to 3% of the principal 

involved. The commission is added to the principal amount 

of a purchase or subtracted from the proceeds of a sale. A 

major portion of the cost is remuneration to the financial 

advisor. This directly and indirectly benefits the client, as 

the financial advisor earns compensation for providing the 

financial advice and dedicating the time to servicing the 

client’s account. Contrasted to the costs of marketing and 

selling other types of products, these costs are very low and 

include both the internal and external out-of-pocket costs 

associated with effecting the trade on an exchange or in the 

over-the-counter market.

If a client generates considerable activity and consequent 

commission revenue or does not utilize the services of the 

financial advisor, a discount from standard rates may be 

negotiated. However, if a financial advisor is providing good 

service to a client, the client’s cost is small contrasted to 

the value of professional financial advice. Good financial 

decision-making requires broad investment knowledge, a 

general understanding of tax laws, the capacity to analyze 

investment alternatives, and the skill to design a financial 

plan and complementary investment strategy customized to 

an individual’s needs, objectives and risk profiles, as well 
IMPORTANT INVESTOR EDUCATION

12

as input related to the method and timing of a transaction. 

Research information on securities provided by the 

investment firm is an essential element in the decisionmaking process.

Principal products (i.e., over-the-counter stocks or bonds in 

which the financial advisor’s brokerage firm is a dealer as 

well as a broker) have commissions that are more difficult 

to identify. The financial advisor receives a commission 

that is referred to on the trade confirmation as a markup or 

markdown. Additionally, the broker/dealer may also make 

a trading profit or take a trading loss on the transaction. 

Prices are reflected to the client net of these costs.

New issues of securities include remuneration to the financial advisor and the securities firm. The amount is included 

in the offering price and reduces the net proceeds to the 

issuer. The total spread and the commission portion are described in the offering prospectus.

These securities include initial public offerings of all security types, new issues for companies that are already public, 

as well as open-end mutual funds, unit investment trusts 

and annuities, among others. In addition, there may be 

alternative methods of paying sales costs or discounts for 

which you may be eligible. (Please see “Mutual Funds” on 

page 19 and “Annuities” on page 24.)

An asset-based fee is an annual fee – paid quarterly – 

based on a percentage of assets in the account. The fee 

varies with respect to account size, types of securities, 

and the level of advice and services provided by the financial advisor. Through this compensation structure, the 

client, the financial advisor and the securities firm share 

a common interest in increasing the size of the client’s 

assets. The asset-based fee is independent of transaction 

activity. As a result, the fee may be higher than the cost of 

a commission alternative during periods of lower trading 

activity. When considering your payment alternatives, 

you should carefully analyze the projected costs of an 

asset-based fee account versus other types of accounts, 

including such factors as transaction size and volume, 

level of service expected from the financial advisor, and 

personal philosophical convictions.

There are also pricing alternatives utilizing asset-based 

fees, in conjunction with lower transaction fees, to accommodate various types of assets and activity levels. In the 

event a client wishes to purchase a new issue in this type 

of account, there is an exception, as the client will pay the 

commission described in the prospectus and that security 

will be excluded from the asset-based fee for one year.

Raymond James client accounts offer all of these pricing 

options. A client should consult his or her financial advisor 

to select the alternative or series of alternatives that best 

suit his or her individual needs.

In order to recognize that the use of leverage through a 

margin loan may be appropriate, financial advisors are 

compensated at a rate of approximately 15 basis points 

(0.15%) on margin balances, credited to them annually.

Commissions and related costs are reported to clients 

on trade confirmations. Read your confirmations, as 

they describe the security in detail not provided by other 

firms. A current copy of our fees and charges is available 

from your financial advisor or by visiting our website, 

raymondjames.com.

INDIRECT COMPENSATION FOR ORDER FLOW

Some transactions, generally in equities and options, 

involve an indirect form of compensation to the firm. If 

transactions are directed to it, the firm receiving the 

directed order may reciprocate by giving other orders to the 

referring firm. This practice is somewhat common for listed 
13

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

orders directed to “third-market” firms that execute trades 

at prices equivalent to or better than exchange quotes, as 

well as in the over-the-counter market. Similarly, firms may 

receive payment for order flow on some options transactions. The amounts vary substantially, but generally do not 

exceed $0.75 per contract. All market makers do not pay for 

option order flow and such payment is not generally relevant 

in making the decision as to where to send the transaction. 

Raymond James & Associates will send trades to a particular broker/dealer or market center in order to receive best 

execution quality. As a result, we may receive compensation. 

It may also be possible that this practice has resulted in markets that are less efficient. The source and specific amount 

of any such compensation are available upon request.

Additionally, Raymond James & Associates is a market maker in a number of over-the-counter securities. As a result of 

these directed orders, trading profits or losses may be generated by Raymond James in stocks purchased by clients.

MUTUAL FUNDS

Raymond James1 offers clients a wide range of investment 

alternatives and services, including a variety of mutual funds. 

Deciding which mutual funds to invest in can be complex. 

It is important for you to work with your financial advisor 

to evaluate how a fund’s investment objectives, risks and 

associated costs fit your individual needs and objectives. 

An important aspect of this fund screening and selection 

process is to read the fund’s prospectus carefully before 

investing. Each prospectus contains important information 

that will help you make informed decisions. Your financial 

advisor will provide you a prospectus for the funds you are 

considering. He or she will also answer your questions on 

how the fund’s shares are priced and the compensation the 

financial advisor and Raymond James will receive from 

your investment. 

The popularity of mutual funds results from features 

including professional management, diversification, daily 

pricing and redemption, and ease of purchase, among other 

investor benefits. Because many funds have minimum 

investments as low as $1,000, mutual funds have become 

the investment of choice for many large and small investors. 

Their popularity has grown significantly in recent years, 

and almost half of all U.S. households now own mutual 

funds (Source: Investment Company Institute 2004 Mutual 

Fund Fact Book). 

It is generally advisable to select a mutual fund whose manager has extensive experience and qualifications, along with 

a well-defined discipline and consistent performance record. 

While past performance is not indicative of future results, a 

fund’s long-term performance record and manager tenure 

are also likely to be factored into the selection criteria. Your 

financial advisor will help you review a fund in light of your 

investment objectives to assist you in making a decision that 

may help you achieve your specific investment goals, as this 

selection may pertain to that portion of your portfolio. 

Costs

All mutual funds charge management fees, which are 

used to pay for the fund’s continuing operation, including 

paying the fund’s portfolio manager, accounting expenses 

and recordkeeping costs. Many funds also have sales 

charges, which are partially used to compensate financial 

advisors for providing financial advice and client service. 

These sales charges may be charged when you make your 

investment (known as a “front-end sales charge”), when 

you redeem your investment (known as a “back-end sales 

charge” or redemption fee) or annually, in the form of 

“12b-1” fees or service fees. 

Please note that 12b-1 fees are used for overall marketing 

expenses and also to compensate the securities firm for activities or expenses related to distribution and/or retention 

1

Raymond James & Associates, Inc., and Raymond James Financial Services, Inc.
IMPORTANT INVESTOR EDUCATION

14

of fund shares, such as compensation paid to your financial 

advisor and to participating dealers who have entered into 

sales agreements with Raymond James; advertising, salaries and other expenses of Raymond James relating to sales 

or servicing efforts; expenses of organizing and conducting 

educational and sales seminars, printing of prospectuses, 

statements of additional information, and reports for other 

than existing shareholders; preparation and distribution of 

advertising material and sales literature and other sales 

promotion expenses; or for providing ongoing services 

to shareholders.

Depending on share class and the type of account, the initial sales charge can range from 0% to 8.5%, based on the 

fund and size of the transaction. For a further explanation 

of mutual fund share classes and their related fees, please 

visit the Financial Industry Regulatory Authority website 

at FINRA.ORG.

Reducing Sales Charges

While it may sometimes be judicious to own mutual funds 

from different fund families, it may also increase your total 

costs. Fund families often offer discounts on Class A share 

sales charges based on the investor’s total dollars invested 

within the fund group. The holdings levels necessary 

to receive these discounts are known as “breakpoints.” 

Often, fund groups will allow you to combine your holdings 

with those of your immediate family members to reach 

breakpoints. Each mutual fund describes its breakpoint 

policies, including how investors can reach breakpoints, 

how the fund group defines which family members qualify 

as “related,” and which funds and account types qualify for 

breakpoints, in its prospectus.

When your financial advisor executes trades in mutual 

funds on your behalf, he or she calculates any Class A 

share breakpoints to which you may be entitled based 

on accounts you have with Raymond James, as well as 

The fund industry has developed share classes to give investors more choices for how 

they pay sales charges. The most common share classes are Class A, Class B and Class 

C. Each class has different fees and expenses applied, and therefore results in different performance outcomes when fees and expenses are included. While there are no 

standard, industry-wide definitions of these classes (each fund defines its share classes 

in its prospectus), some of the typical differences are discussed below. 

Class A – This class usually carries a front-end sales charge. This means a percentage 

of your investment is deducted from your initial investment. Typically, Class A shares 

have lower expense ratios (total annual fund operating expenses as a percentage of 

the fund’s assets) compared to the other share classes of the same fund. Most funds 

offer “breakpoint” discounts if you make a large purchase, already hold mutual funds 

in the same family in your account or commit to purchasing additional shares. These 

breakpoints are described in the fund’s prospectus. Please see the “Reducing Sales 

Charges” section for more information. For very large purchases, A shares are often 

the least expensive option.

Class B – This class is characterized by a back-end sales charge, meaning that a sales 

charge may be paid when you redeem (sell) the fund. Class B shares do not usually have 

a front-end sales charge at the time of purchase. They impose a contingent deferred 

sales charge (CDSC), which you pay if you sell your shares prior to the end of the CDSC 

holding period. The CDSC normally declines and eventually is eliminated the longer you 

hold your shares. Once the CDSC is eliminated, Class B shares usually convert to Class 

A shares. Class B shares will generally have higher management expense ratios when 

compared to front-end shares (usually Class A) within the same family. Since Class B 

shares rarely offer breakpoints, they are usually inappropriate for large purchases.

Class C – This class has a constant sales fee that is charged to the fund each year 

throughout the life of the investment in the fund. Class C shares frequently impose a 

contingent deferred sales charge (CDSC) if you sell your shares within a short time of 

purchase, usually one year (see the fund’s prospectus for more information). Class C 

shares typically have higher management expense ratios than Class A shares. In most 

cases, the expense ratio would be higher than Class A shares, and even Class B shares, 

if you hold the shares for a long time. 

Because your expected holding period for each mutual fund plays a role in determining 

which share class is best for you, you should provide your financial advisor information 

about how long you plan to hold your mutual fund shares. 

Fee-based Accounts – Mutual funds may also be owned in fee-based accounts. In 

fee-based investment advisory accounts, an annual fee – paid quarterly – is based 

on a percentage of assets in the account. The fee varies with respect to account size, 

type of securities managed, style of management and/or other services provided. One 

advantage is that you can select funds from different fund families without concern 

for commission charges. Since it is an asset-based fee, costs are usually independent 

of transaction activity. Additionally, the financial advisor and the securities firm share 

the client’s interest in seeing the value of the assets increase. When considering your 

alternatives, you should carefully analyze the projected expense of a fee-based account versus commission-based accounts, including such factors as transaction size 

and volume, level and types of service expected from the financial advisor, as well as 

your own convictions as to how you are most comfortable paying for these services. 

Fees are negotiable.
15

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

other account information you have shared. However, if 

your financial advisor does not have the most complete 

information concerning your investments, particularly any 

held directly with a fund company rather than through the 

securities firm, he or she may not be able to best help 

you take advantage of sales charge breakpoints – either 

through recouping charges you may have overpaid or by 

taking advantage of breakpoints in the future. Therefore, 

you should take a few minutes to review your records to 

determine what other mutual fund investments you have 

made either at other securities firms or directly with fund 

companies, and regularly provide that information to your 

financial advisor.

Although mutual fund breakpoint policies can differ, here 

are some common ways they can be achieved:

RIGHTS OF ACCUMULATION: “Rights of accumulation” 

allow you to combine your mutual fund purchase with your 

existing investments in the fund family to reach a breakpoint 

on new purchases. Rules for rights of accumulation and 

precise breakpoints will vary from one fund family to the 

next. Consult the prospectus and/or your financial advisor 

for information on how rights of accumulation may be 

applied to their specific investments. 

LETTER OF INTENT: Investors can take advantage of 

rights of accumulation from the time they purchase initial 

shares by agreeing to invest a certain dollar amount over 

a specified period of time. In most instances, this requires 

signing a Letter of Intent (LOI). In addition, many mutual 

fund companies also permit investors to include purchases 

completed before the letter of intent is signed, by instating 

a retroactive letter of intent. However, if the amount stated 

for investment in the letter of intent is not invested, the fund 

can retroactively collect the higher sales commission. 

NET ASSET VALUE (NAV) TRANSFERS AND BUY BACKS:

After an investor redeems fund shares, some fund families 

will allow him or her to buy back into certain funds within 

a certain time frame without a Class A share sales charge. 

They may even allow the investor to apply past redemptions 

of funds from other fund families toward purchases into 

their fund family at no sales charge. Please see a fund’s 

prospectus or the statement of additional information 

(SAI) or specific policies.

Finally, it is important to note that while Class A share 

breakpoints are beneficial, you should not forsake prudent 

asset allocation among mutual funds simply to take 

advantage of them. It is wise, however, to select a mutual 

fund that is part of a family of funds if you choose to 

purchase Class A shares in a commission-based account. 

As your objectives change, you can switch among the funds 

in the family whose objectives most closely meet your needs 

without incurring an additional sales charge. Staying within 

the same fund family may be preferable, since switching 

from one fund family to another often involves additional 

costs or fees. At the same time, there can be legitimate 

reasons to switch to a fund in another family of funds when 

the existing fund family does not have the type of fund 

required or that fund family’s alternatives don’t appear to 

be as well managed based on long-term historical results. 

If you do choose to switch to a fund in a different family 

or to another type of investment, and your account with 

Raymond James is commission-based, you will most 

likely incur a sales charge on the new investment. In those 

instances when a mutual fund switch to a different fund or 

to a variable annuity will result in a new commission being 

charged, you and your financial advisor will be required to 

execute a Mutual Fund/Annuity Switch Disclosure Form. 

The additional sales charges, if any, will be disclosed on 

this form and you will be asked to acknowledge that you 

may have been able to switch within your existing open-end 

mutual fund family.
IMPORTANT INVESTOR EDUCATION

16

How Raymond James and Your 

Financial Advisor are Compensated

Raymond James and your financial advisor receive compensation for selling, recordkeeping and monitoring mutual 

funds that varies by share class. Raymond James is paid 

by the fund family from the total commissions, fees and 

expenses paid by investors, and a portion of that payment 

to Raymond James then goes to your financial advisor. The 

compensation formula to determine the amount of payment 

to your financial advisor is the same for all funds, including 

any funds managed by Raymond James’ affiliates as investment manager. 

Some fund classes carry higher sales charges or assetbased fees than others (e.g., Class A shares may have 

higher or lower front-end sales charges, depending on the 

size of the purchase and therefore higher or lower compensation to Raymond James than Class B shares). As 

a result, your financial advisor may receive more or less 

compensation depending on the fund or share class you 

purchase if purchased on a commission basis. In addition, 

while the absolute amount of your financial advisor’s initial 

compensation is lower for Class C shares, the percentage 

of the initial payment, in some instances, may be greater 

than the percentage that the financial advisor receives for 

the sale of Class A or Class B shares.

Raymond James does not participate in programs that provide preferential treatment to financial advisors based upon 

the sale of certain mutual funds. Raymond James financial 

advisors are compensated at the same level and compete 

on a level playing field in terms of transaction charges for 

sales within all fund families. 

Our financial advisors currently have available approximately 9,000 mutual funds from more than 230 fund families. 

EDUCATION AND COMMUNICATION: Consistent with 

FINRA rules, fund distributors and/or their affiliates may 

compensate Raymond James for training and education 

seminars for Raymond James’ associates, financial advisors, clients and potential clients. This may include due 

diligence meetings regarding their funds, recreational activities or other non-cash items. The representatives of 

fund companies attend meetings, provide speakers for educational presentations and attend events where they can 

interact with our financial advisors. 

Other Raymond James Services and Compensation

Mutual fund companies may also compensate Raymond 

James and its affiliates for services in addition to sales 

charges and asset-based fees in connection with clients’ 

purchasing and holding mutual funds. This compensation 

may not be disclosed in detail in a fund’s prospectus. 

Raymond James’ clients can purchase shares of those mutual 

funds whose affiliates have entered into contractual 

arrangements with Raymond James. This contractual 

arrangement provides for the payment of one or more of the 

fees described below. These fees do not purchase placement 

on any preferred product lists or any special positioning or 

research coverage of funds by Raymond James. Instead, 

these fees are used to cover the types of services outlined 

below and are not shared with Raymond James financial 

advisors or their branch managers as compensation.

ADMINISTRATIVE AND OTHER: Fund companies with 

funds electronically linked or “networked” with a broker/

dealer’s account system or with funds available through a 

broker/dealer’s fee-based account programs often reimburse broker/dealers for a portion of their account administrative costs, which can include accounting, reporting and 

other services to shareholders.

Networking is a service that enables the sharing of data be-
17

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

tween Raymond James and mutual fund companies. For networked accounts, Raymond James – rather than the mutual 

fund company – produces statements, trade confirmations 

and IRS form 1099s, in addition to providing client service. 

Fee-based account-eligible funds may reimburse Raymond 

James up to $15,000 annually for the costs associated with 

setting up the funds for availability in these accounts, performance reporting software, enhanced statements, and 

marketing- and sales-related costs, among others.

MARKETING SERVICE AND SUPPORT: Raymond James 

provides a variety of marketing services and other support 

to sponsors of mutual funds regarding their funds. These 

services include, but are not limited to, the provision of: detailed mutual fund information to financial advisors, strategic planning support to assist fund sponsors by making 

financial advisors available for educational information 

regarding their funds and branch office support, including 

phones, computers, conference rooms, as well as facilities 

and distribution support for prospectuses and promotional 

materials relating to their funds.

CERTAIN RETIREMENT PROGRAM ADMINISTRATION 

FEES: Raymond James receives an annual fee of up to 

$5,000 for providing administrative services to the mutual 

fund companies that offer corporate retirement plans. 

AFFILIATED FUNDS: Raymond James makes available to 

its clients a variety of mutual funds advised by its affiliate, 

Eagle Asset Management. Raymond James may receive 

more revenue from selling these funds because it receives 

compensation for providing these affiliated funds investment advisory, administrative, transfer agency, distribution 

and/or other services that Raymond James may not provide 

to unaffiliated funds. However, it is important to note that 

Raymond James financial advisors receive the same compensation and compete on a level playing field for sales of 

funds from all available fund families. 

OTHER SERVICES: Raymond James Financial, Inc. (NYSERJF) is a Florida-based diversified holding company whose 

subsidiary companies provide financial services to individuals, corporations and municipalities. For these services, Raymond James receives compensation. As a result, 

Raymond James pursues additional business opportunities with companies whose mutual funds Raymond James 

makes available to its clients. Consistent with industry regulations, these services could include (but are not limited 

to) banking and lending services, sponsorship of deferred 

compensation and retirement plans, investment banking, 

securities research, institutional trading services, investment advisory services, and effecting portfolio securities 

transactions for funds and other clients. Raymond James 

professionals who offer mutual funds to individual investor clients may introduce mutual fund company officials to 

other services that Raymond James provides.

A mutual fund’s business policies can be found in its 

statement of additional information, which is available on 

request from the fund company. For additional information 

on mutual funds in general, contact your financial advisor 

or visit the educational websites of the U.S. Securities and 

Exchange Commission at SEC.GOV, the Financial Industry 

Regulatory Authority at FINRA.ORG, the Securities Industry Association at SIA.COM, and the Investment Company 

Institute at ICI.ORG.

Disclosure

Mutual fund companies are required to outline revenuesharing arrangements, along with a fund’s fees and risks in 

their prospectus and/or statement of additional information.

In addition to the disclosure information posted in this 

brochure, Raymond James provides disclosure through:
IMPORTANT INVESTOR EDUCATION

18

• Our trade confirmations. Each mutual fund trade 

confirmation indicates, “Raymond James & Associates, 

Inc. or its affiliates may have received compensation 

from the distributor of this fund, or the fund’s investment 

advisor or sub-advisor. This may also be referred to as 

revenue sharing.”

• Sponsor companies, which may also route some portfolio trades through those distributors for execution and 

research services. These payments do not generally 

exceed $.05 per executed share.

• Our open-end mutual fund research reports on which 

the following disclosure appears: “Raymond James 

& Associates, Inc. or its affiliates may have received 

compensation from the distributor of this fund, or 

the fund’s investment advisor or sub-advisor.”

Investors should carefully consider the investment objectives, risks, charges and expenses of mutual funds before 

investing. The prospectus contains this and other information about mutual funds. The prospectus is available 

from your financial advisor and should be read carefully 

before investing.

ANNUITIES

Another investment alternative that has grown in popularity is the annuity. Annuities are investment products – issued by insurance companies – that offer tax-deferred 

capital accumulation as well as certain types of insurance 

guarantees. Annuities also have the ability to provide a 

guaranteed lifetime income stream. All guarantees are 

backed by the issuing insurance company and its ability to 

pay. Consequently, careful research is required before purchase. Additionally, if you are buying an annuity to fund a 

retirement plan that already provides tax deferment (such 

as an IRA, 401(k) or 403(b) plan), you should do so for the 

annuity’s other features and benefits, because tax deferment would not be an additional benefit.

There are four basic types of annuities:

• An immediate annuity is purchased with a single payment 

and, characteristically, distributes a specified income 

stream that commences immediately.

• A fixed annuity guarantees a fixed rate of return for a 

specified period of time. It is generally designed to provide guaranteed-level payments for a specified period of 

the annuitant’s lifetime, on a tax-advantaged basis.

• A fixed index annuity, or equity index annuity, as they are 

commonly referred to, is a type of fixed annuity in which 

the rate of return is tied to a well-known index such as 

the S&P 500. Returns are capped at a certain percentage, as determined by the insurance company. 

• A variable annuity combines many of the characteristics 

of mutual funds with the tax-deferral and the insurance 

features of annuity products, such as a guaranteed 

minimum death benefit regardless of the current value 

of the account. A variable annuity may be invested in 

an array of investments as described in the prospectus 

issued by the issuing insurance company. Each variable 

annuity may offer a variety of managers and investment 

opportunities that may be utilized individually or in 

combination. Keep in mind that, like most investments, 

variable annuity contracts will fluctuate in value and are 

subject to market risk, including the potential for loss 

due to market declines. When making decisions among 

the investment alternatives offered, investors must consider their overall asset allocation objectives.

The most common compensation option for annuity contracts involves the payment of a commission to the firm, 

which the insurance company advances from future annual 

fees. The annuity contract usually includes a contingent deferred sales (surrender) charge, which declines over time, 

to recompense the insurance company for the advance of 
19

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

commissions and other front-end costs should the investor 

cancel during the surrender charge period. Annual fees are 

usually higher in annuity contracts than those associated 

with mutual funds with similar objectives in order to pay for 

the higher commissions and insurance benefits. Hence, investors should compare both cost structures in conjunction 

with individual tax considerations before investing. Investors should select variable annuities with ample investment 

options to avoid incurring a surrender charge should they 

decide to change their investment options.

Many annuities are priced on our client account statement 

for information purposes. We continue to add companies 

and products as we are able; however, not all insurance companies or annuity products provide us with this information.

Compensation Paid to Raymond James When You 

Purchase a Variable Annuity

Commission schedules and amounts vary by insurance company and annuity product. What, and how, Raymond James 

and your financial advisor are compensated when you purchase a variable annuity depends on the type of annuity you 

purchase and the insurance company issuing the annuity.

You should feel free to discuss with your financial advisor 

how he or she is compensated following your annuity purchase. This document explains in general terms how the 

compensation arrangements work.

Contingent Deferred Sales Charge Annuities

When you purchase a variable annuity, Raymond James is 

compensated by the insurance company issuing your annuity contract. Subsequently, your financial advisor receives 

a significant percentage of the annuity commissions. The 

commissions paid to Raymond James by the insurance company are not deducted from your purchase payments. If you 

surrender your annuity during the contingent deferred sales 

charge period specific under your annuity contract, a “surrender charge” is deducted from the annuity value that is 

returned to you. The surrender charge amount may reimburse the insurance company for costs associated with marketing the annuity product including the commission paid.

How Your Financial Advisor Receives Commissions

Your financial advisor typically has a choice of commission 

options regarding receipt of the commission payable to 

Raymond James. The insurance company that issues your 

contract pays the commissions directly to Raymond James 

and recoups the marketing and distribution expenses, 

including commissions, over time from your annuity contract expenses. In most cases, the structure of the commission selected by your financial advisor will have no impact 

on your annuity contract expenses. Annuity products may 

offer the following commission options:

• A single, lump sum commission based on your 

purchase amount,

• A slightly reduced lump sum commission and assetbased trail commissions paid quarterly over a number 

of years, or

• A further reduced lump sum commission and higher 

asset-based trails paid quarterly over a number of years.

Other Compensation Paid to Raymond James 

by Insurance Companies

Raymond James distributes annuities from at least 20 insurance companies and receives additional compensation 

from them in the form of sales- and asset-based education 

and marketing support payments. The additional compensation is not paid directly from the assets of your variable 

annuity. Moreover, no portion of these payments received by 

Raymond James is paid or shared directly with your financial 

advisor or his or her respective branch office. The payments 

are paid directly from the insurance companies and are not 

deducted from the separate accounts that hold the variable 

annuity assets. 
IMPORTANT INVESTOR EDUCATION

20

Education and Marketing Support Payments

Raymond James provides a variety of marketing and other 

sales support services to insurance companies related to 

their annuity products. These services include, but are not 

limited to:

• Providing detailed product information to 

financial advisors, 

• Assisting insurance companies with strategic 

planning and sales support, 

• Providing presentation opportunities during 

professional development workshops, study groups, 

and other Raymond James events and conferences, and 

• Distribution support for sales literature and other 

promotional materials relating to their annuity products. 

The marketing service and support fees come in a variety 

of forms, including payments sometimes referred to as 

“revenue sharing” fees and 12b-1 fees. This compensation 

may not be disclosed in detail in a variable annuity’s 

prospectus or contract language. At Raymond James, 

these fees do not provide placement on any preferred or 

recommended product lists. 

The following schedule gives you an idea of the potential 

level of marketing support or revenue sharing fees that 

Raymond James may receive from a particular insurance 

company or distribution affiliate:

• Up to 0.15% on variable annuity purchases 

(e.g., $15 for a $10,000 purchase), 

• Up to 0.05% per year on assets totaling less than 

$500 million, 

• Up to 0.04% per year on assets totaling $500 million 

to $1 billion, 

• Up to 0.03% per year on assets totaling $1 billion 

to $2.5 billion, and

• Up to 0.02% per year on assets totaling $2.5 billion 

or greater. 

The actual amounts that Raymond James may receive will 

vary from one insurance company to another and investments in certain variable annuity share classes and/or 

investment sub-account options may be excluded from the 

above formulas.

In addition to payments described above, insurance companies and/or distributors will periodically reimburse 

Raymond James for expenses incurred in connection with 

certain training and education meetings, conferences, and 

seminars. Raymond James financial advisors may also 

receive promotional items, meals or entertainment, or other 

similar “non-cash” compensation from representatives of 

the insurance companies. 

Please contact your financial advisor with any questions 

regarding insurance-related products and services, your 

specific annuity contract(s), or regarding the insurance 

company relationships with Raymond James.

Investors should consider the investment objectives, risks, 

and charges and expenses of variable annuities carefully before 

investing. The prospectus contains this and other important 

information. Prospectuses for both the variable annuity contract and the underlying funds are available from your financial 

advisor and should be read carefully before investing.

Variable annuities, issued by insurance companies, are longterm investment alternatives designed for retirement purposes. 

Withdrawals of taxable amounts are subject to income tax and, if 

made prior to age 591⁄2, may be subject to a 10% federal tax penalty. An investment in variable annuities involves risk, including 

possible loss of principal. The contract, when redeemed, may be 

worth more or less than the original investment.

EQUITY RESEARCH REPORTS
21

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

Raymond James devotes considerable resources to providing quality research, and publishes reports on more than 

600 companies in a variety of industries. Our analysts are 

often recognized for stock-picking performance, both individually and as a group. In fact, the team’s stock-picking 

recommendations have regularly finished first for fiveyear performance in an annual survey conducted by Zacks 

Investment Research, consistently outperforming the 

market, as well as the stock selections of competing firms.

Because research must be supported by revenue-producing 

activities, potential conflicts of interest exist. More specifically, research is typically paid for by commissions generated through institutional and retail sales and trading, as 

well as by investment banking activities, including stock 

underwriting. Since managements may not respond well to 

negative conclusions about their companies’ stock or, in the 

case of large institutional holders, about recommendations 

vis-à-vis the stocks that they own, it is possible that those 

constituencies might attempt to influence analysts’ opinions. Raymond James’ policy is to require analyst objectivity and to support analysts’ conclusions, even if contrary to 

the interests of our investment banking activities. It should 

be noted that while all parties may be well-intentioned, 

these assessments are somewhat subjective and differences of opinion are quite normal.

The following is Raymond James’ position on the independence and integrity of our research and our policies to manage potential conflicts of interest.

Research is conducted in a manner consistent with the 

firm’s business principles and investor objectives. The firm 

encourages thorough and insightful assessments of industries, companies, and the outlook for individual securities 

and the general market. Raymond James prizes analyst 

independence, objectivity, thorough analysis and integrity. 

Management believes that value-added analysis and independent judgment are critical elements in the quest for 

superior investment performance. Raymond James equity 

analysts strive to anticipate both positive and negative information and to respond accordingly with timely changes 

in ratings, earnings estimates and price targets. Our primary goal is to contribute to the success of our investing 

clients by providing opinions and information based on the 

analysis of available facts.

A variety of factors go into the research process, including 

an assessment of industry dynamics, interviews of company executives, analysis of the competition, and information 

as available from the suppliers, distributors, major customers and other independent sources. Analysts are encouraged to develop opinions that may differ from those of the 

management of companies that they are evaluating. Valuation methodologies, investment risks and conclusions are 

discussed in all basic company research reports.

Expected returns are utilized in our ratings analysis, but 

these expectations are not a guarantee of the success of 

the investments and are the analysts’ own opinions based 

an individual analyst’s assessment of a company’s prospects and his or her “guess” about market direction.

This analysis is summarized in a rating for stocks in our 

coverage universe as follows:

• Strong Buy – The stock is expected to appreciate and 

produce a total return of at least 15% and outperform 

the S&P 5002 during the next six months. For higher 

yielding and more conservative equities, such as real 

estate investment trusts and certain master limited 

partnerships, a total return of at least 15% is expected 

to be realized over the next 12 months.

• Outperform – The stock is expected to appreciate and 

outperform the S&P 500 over the next 12 months. For 
IMPORTANT INVESTOR EDUCATION

22

higher yielding and more conservative equities, such 

as REITs and certain MLPs, an Outperform rating is 

used where we are comfortable with the relative safety 

of the dividend and expect a total return modestly exceeding the dividend yield over the next 12 months.

• Market Perform – The stock is expected to perform 

generally in line with the S&P 500 over the next 12 

months and is potentially a source of funds for more 

highly rated securities.

• Underperform – The stock is expected to underperform 

the S&P 500 or its sector over the next six to 12 months 

and should be sold.

Obviously, stocks that we consider most attractive for purchase are rated Strong Buy. Our Focus List includes the 

Equity Research Department’s favorite Strong Buy-rated 

securities. While past performance does not guarantee 

future results, the firm’s Focus List has performed better 

than the Strong Buy-rated securities over time, as would be 

expected. Generally, we believe that only stocks in the first 

two categories – Strong Buy and Outperform – should be 

purchased or retained, as the goal of research is to outperform the market. Market Perform-rated securities are not 

expected to do that and, depending upon other considerations such as taxes and portfolio diversification, can be 

viewed as either holds or sources of funds. These decisions 

are typically client- or portfolio-specific and we recommend 

that clients seek the advice of their financial advisors.

Since our research is limited to 700 public companies, 

which are often small- or mid-cap, we supplement it with 

research provided by select other firms, which focuses on 

larger public companies. We do not independently verify 

their information.

Raymond James financial advisors are not required to 

conform to the firm’s opinions. Financial advisors, who are 

more familiar with an individual client’s needs, objectives 

and tolerance for risk, are better able to assess whether a 

stock is suitable for that client and/or may have a different opinion of the investment merits of the security, as 

may other research sources. For example, the direction of 

rating changes – upward or downward – is often considered 

as critical as the rating itself, since good or bad news 

often comes in doses over a period of time. It is also possible that a stock may “bottom out” before the company’s 

fundamentals have improved and the stock may represent 

a good value even though the analyst has not yet upgraded 

the stock. Nonetheless, additional care should be employed 

when purchasing stocks other than recommendations rated 

Strong Buy.

In addition to rating stocks relative to the market and industry group, we also provide ratings that should be used 

to help determine investor suitability:3

TOTAL RETURN – More conservative investments with 

dividend yields of 2.5% or more and favorable appreciation prospects.

GROWTH – Quality companies with well-above average 

appreciation potential, quarterly earnings consistency and 

possibly a small dividend.

AGGRESSIVE GROWTH – Companies with rapid growth 

potential and accompanying higher risks.

CYCLICAL – Companies with fundamentals that are unusually sensitive to changes in major economic trends.

SPECULATIVE – Small companies with high risks, including variable earnings, financial and competitive factors, 

and liquidity issues.

VENTURE RISK – Newer companies with a short, unprofitable operating history, limited revenues and a much higherthan-normal risk associated with success.

2

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest 

directly in any index and index performance does not include transaction costs or other fees, which will affect actual investment performance.

3

Suitability ratings are not assigned to stocks rated Underperform.
23

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

While our analysts’ track records are good, they are far 

from perfect. Analysts are not able to independently check 

and verify all facts and, to a large degree, must rely on information provided in public financial disclosure and by company officials. Regulatory actions designed to assure equal 

disclosure to public investors may even have impeded the 

timely flow of information to analysts. Overly optimistic or 

fraudulent management can mislead analysts and financial 

advisors. However, our analysts attempt to develop other 

industry information sources from trade groups, government agencies and competitors, as well as suppliers and 

customers of the subject companies. In periods of poor 

general market performance, it is difficult for individual securities not to be affected. All the other factors included on 

page 13, in the “Understanding Investment Risk” section of 

this brochure, may also cause our ideas not to perform as 

expected. Thus, our recommendations represent our analysts’ best judgments given available facts and public information, not guarantees of investment performance. Some 

of our ideas will lose money, although historically, our average long-term performance has been very good.

Raymond James and Associates policies and procedures 

are reasonably designed to ensure compliance with regulatory rules applicable to equity research.

Research management is committed to providing an environment that encourages thorough and independent securities analysis unaffected by inappropriate influences upon 

stock ratings, earnings estimates and price targets. Our 

operating principles are designed to minimize or eliminate 

the potential for conflicts of interest. Sources of conflict 

may be internal in nature, stemming from the fact that we 

may be an investment banker to a covered company, or 

external in nature, such as potential pressure from covered company executives or institutional owners. Research 

is organized and policies are in place to manage potential conflicts. For example, if a report is to be reviewed 

by a company for factual accuracy prior to publication, 

the investment rating and thesis are removed to ensure 

analyst independence and confidentiality with respect to 

the intended rating.

Equity analysts’ compensation is based on a salary and 

bonus system. Many factors enter into the bonus determination, including the analyst’s success in effectively rating 

stocks versus an industry index. Other factors considered 

include: overall productivity, support effectiveness to our 

financial advisors and traders, institutional research votes, 

and business generated in covered stocks. In all cases, 

this assistance must comply with all U.S. Securities and 

Exchange Commission, NYSE and FINRA regulations and, 

most important, place investor interests above all else.

Research does not and has never reported to the Investment Banking Department at Raymond James. Moreover, 

Investment Banking has no direct or indirect approval of 

the ratings, earnings estimates and/or price targets of 

companies covered, whether the subject company is an 

investment banking client or not. Although an analyst may 

occasionally be brought “over the wall” to work with an investment banker on a transaction, it is clearly understood 

by all parties that the independence of the analyst and the 

interest of the investing client are the first priorities of the 

analyst. In fact, the analyst’s opinion is solicited in the due 

diligence process to determine if our firm should assist a 

potential corporate client.

Analysts and other research employees are required to put 

client interests ahead of personal investments. Moreover, 

personal interests must be fully disclosed and consistent 

with investment recommendations. Analysts and their research associates are not permitted to purchase equityrelated securities in companies that they cover. They are 
IMPORTANT INVESTOR EDUCATION

24

permitted to sell existing equity positions in covered companies no sooner than five days after the rating has been 

reduced to Underperform.

Analysts’ and research associates’ ownership of stocks 

that they cover is disclosed in all equity research reports 

discussing those securities. Additionally, relevant private 

investments or business interests cannot conflict with company analysis and must be disclosed in related company reports. Finally, analysts cannot cover securities of companies 

in which they or members of their households or immediate 

families are officers, directors or advisory board members.

Raymond James’ clients have the right to expect the 

firm’s analysts to provide advice reflective of their 

objective conclusions after diligent analysis. That research 

must be intended to generate results consistent with the 

clients’ best interests, though some of those recommendations will inevitably prove unprofitable. However, when 

investing in individual stocks, it is the client’s responsibility to read the research in order to make better-informed 

investment decisions.

KNOWING WHAT YOU ARE READING 

WHEN YOU READ A PROSPECTUS

If consideration is being given to purchasing stock in an initial 

public offering or secondary offering, the prospectus is one 

of the most important documents for investors.

If the prospectus is for a mutual fund, investors should 

closely examine sections related to:

• Risks – What types of investment risk are inherent to 

the investment? For example, is it a lower-quality issue 

or one from a smaller, less proven company? Does the 

investment present any structural risks, such as reliance 

on an insurance company’s backing? What is the risk 

that the fund may not meet its stated objective?

• Expenses – Examine items such as sales charges and 

internal administrative expenses to determine the costs 

of owning shares in the investment. Are these costs reasonable in relation to the fund’s asset size and investment objective?

• Management experience – Study the management team. 

What are the members’ backgrounds? How long have they 

been in their positions? Do they have extensive experience 

managing money within the fund’s stated objective?

When reading a prospectus for an initial public offering or 

a secondary offering, investors should carefully consider:

• The company’s business model – A potential investor 

should be comfortable with the issuer’s business model, 

including the company’s actual products or services 

provided, strengths and weaknesses within its industry, 

the diversity of the company’s customer base, the 

competitive landscape, and strategies for future growth.

• The offering composition – Determine if the offering 

is 100% primary stock (coming from the issuing 

company) or if there are any selling shareholders. If 

there is a selling shareholder component, analyze the 

shareholders’ stock positions before and after the 

offering and determine the reason for the shareholders’ 

desire to liquidate.

• Financial statements and management’s discussion – 

Develop a general understanding of the trends in the 

company’s top and bottom lines. Review the company’s 

capital structure and accounting methods. Check for any 

pending legal matters.

• Risk factors – Potential investors should review this 

section of the prospectus very closely. Understand each 

point in-depth and determine whether the risk of the 

offering conflicts with your own risk tolerance profile.

• Use of proceeds – Determine the use of the proceeds 
25

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

from the offering. There should be a defined use that 

will improve the issuing company’s fundamental 

story in some way, whether it is through funding an 

acquisition or future growth, improving the capital 

structure, or another reason.

• Management – Learn about the issuer’s management 

team. Focus on its experience within the industry, its 

compensation structure, the level of insider ownership 

and other incentives it has.

• Board of directors – Research the company’s board 

of directors for experience and how its members are 

compensated. Determine the number of outsiders on 

the board.

• Underwriters and accountants/auditors – Determine the 

experience and reputation of both the underwriters of 

the offering and the company’s accountants/auditors.

Before investing in a public offering, or any offering for that 

matter, read the prospectus carefully and don’t be afraid to 

ask your financial advisor questions.

COMMUNICATIONS WITH YOUR 

FINANCIAL ADVISOR AND OUR FIRM

Communicating with Your Financial Advisor 

Your financial advisor is available to answer your questions 

and discuss your investment strategies during normal business hours. Appointments can generally be arranged at a 

time convenient to you. Your financial advisor is responsible for explaining all pertinent aspects of each investment 

that you consider, particularly risk factors, realistic rates of 

return and liquidity. You also have every right to ask for literature and receive prospectuses when appropriate. If you 

do not clearly understand what you have read, please ask 

your financial advisor to explain the material to you. Never, 

under any circumstances, approve a financial plan or initiate a transaction until you clearly understand what you are 

agreeing to and/or buying or selling. For quotes and current marketing information, please feel free to call at any 

time. If your financial advisor is not available, you may contact the manager of the branch office or Client Services at 

800-647-SERV (7378). If you use voice mail or e-mail, please 

do not leave orders or other time-sensitive messages. 

Failure to apprise your financial advisor or, in the event he 

or she cannot be reached, Raymond James of an address 

change could, under state law, result in assets within an inactive account being surrendered to the state.

Communication from Our Firm

Among the primary communication clients receive directly 

from our firm are trade confirmations; monthly, quarterly 

and/or year-end account statements – in hard copy and/or 

electronically online; notification of the availability of semiannual statements reporting Raymond James & Associates’ financial condition; and our quarterly newsletter, 

Financial Perspectives. Confirmations and statements 

should be retained as a record of your portfolio and its 

performance, and for future reference.

TRADE CONFIRMATIONS

Any time a transaction is executed on your behalf through 

Raymond James (with the exception of direct orders placed 

by you with mutual funds that issue their own communications), you will receive a trade confirmation notice. This is 

not a bill. Rather, it is a report to you of what transpired. 

If you receive online copies of your trade confirmations 

through Raymond James Investor Access, your confirmation will be posted the day following the trade date. For 

those who receive hard copies of their confirmations, in 

most cases, we are able to mail the confirmation within 

24 hours of the transaction; however, your receipt of it 

depends on the U.S. Postal Service’s delivery schedule. 
IMPORTANT INVESTOR EDUCATION

26

While it is rare that a client does not receive a confirmation, 

securities industry regulation requires payment for a purchase by settlement date. Your financial advisor will also 

receive a confirmation for every transaction executed on 

behalf of your account. The confirmation shows all the 

pertinent information regarding the specific transaction, 

generally including a complete description of the security, commissions, accrued interest (if applicable) and the 

total amount of money involved in the transaction. Raymond James’ confirmation is unique within the securities 

industry and will also advise you about your investment, 

including how it was executed and any risk factors that 

you should consider. In addition, it will provide such applicable information as yield to maturity, frequency of interest 

and/or dividend payments, accrued interest, bond ratings 

and call dates. For managed account clients, we offer the 

ability to choose between receiving confirmations following each trade, monthly or quarterly by contacting your 

financial advisor. The combined trade confirmation report 

eliminates the need to review transactions as asset managers execute them. You can select your method of managed account reporting by contacting your financial advisor. It is important that you review and understand these 

notices, which are three-hole punched so you can easily 

keep them for future reference and tax purposes. Any inaccuracies or questions regarding your confirmation should 

be promptly directed to your financial advisor. If the issue 

is not addressed, please contact the branch manager or our 

international headquarters, as discussed under “Conflict 

Resolution” on page 44.

ACCOUNT STATEMENTS

Client account statements, which include a complete, detailed report of your account, are mailed monthly if there 

has been activity in the account during that 30-day period. 

Quarterly statements are sent if there has been no activity during the previous 90-day period or if the account is an 

individual retirement account. Client statements are issued 

on a calendar month-end basis with the cut-off date being 

the last business day of the month. Statements are generally mailed within seven days of month-end. If you access 

your account information online through Raymond James 

Investor Access, your statement will be posted with your 

account information the day it would have otherwise been 

mailed to you. In addition, Raymond James Capital Access 

clients receive an annual summary “13th” month year-end 

statement summarizing all of their account activities for 

the previous year. Your statement will show any securities 

(stocks, bonds, etc.) and cash or margin balances we are 

holding on your behalf, as well as any transactions (trades, 

dividends and interest, cash receipts and disbursements, 

securities receipts, or withdrawals) executed since your 

last statement. For your convenience, you can link your accounts custodied at Raymond James & Associates so that 

you receive all of your account statements in one envelope 

under a comprehensive summary page. Each account will 

be reported in a separate column of the summary, providing 

you an overall total allocation for all accounts on the summary page. All linked accounts will receive statements on 

a monthly basis. To link your accounts, please contact your 

financial advisor.

COMPOSITE STATEMENT OF 1099 FORMS

The Composite Statement of 1099 Forms reflects your calendar year’s income required to be reported to the Internal Revenue Service. These forms include information that 

Raymond James is required to report to the IRS, as well as 

information that you, the taxpayer, are required to report to 

the IRS. You can expect your composite statement to accurately report your income as of our mailing date of January 

31. You can also anticipate notification on your composite 
27

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

statement should you own a security that may require you 

to wait for additional information prior to filing your return. 

These forms should be retained for future reference.

MUTUAL FUND CONSOLIDATED STATEMENTS

Keeping track of mutual fund investments requires sorting 

through and studying separate fund statements when the positions are held directly at each fund. In order to determine the 

total value of your investment, you must manually integrate the 

mutual fund information with your Raymond James statement. 

Raymond James can incorporate your mutual fund activity 

into your Raymond James statement when the positions 

are reflected in your brokerage account through a service 

known as ‘networking.’ Your mutual fund transactions and 

positions will be reported along with those of your stocks, 

bonds and other investments, and the tax reporting is done 

by Raymond James. You will receive one consolidated 

1099 for all your securities, including the networked mutual 

funds. All eligible mutual fund positions held at Raymond 

James are automatically networked.

Note: Some 529 Plan funds can be networked into the brokerage account. However, all reporting requirements remain 

the responsibility of the individual fund companies.

For more information on networking and on adding your 

mutual fund investments to your Raymond James account, 

please contact your financial advisor.

ACCOUNT PROTECTION

Raymond James & Associates is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 

(including $250,000 for claims for cash). An explanatory 

brochure is available upon request, at SIPC.ORG or by 

calling 202-371-8300.

FDIC SIPC Excess SIPC

Covered Investments Bank deposits Registered securities 

and cash

Registered securities 

and cash

Available Coverage $250,000 insurance limit 

per depositor per insured 

institution. You may qualify for 

more than $250,000 in coverage 

if you own deposit accounts 

in different ownership 

categories. (See footnote 

under FDIC section.)

Generally protects SECregistered securities to 

a maximum of $500,000, 

including $250,000 coverage 

for claims for cash

Once a customer’s SIPC 

coverage limit is exhausted, 

excess SIPC provides an 

aggregate firm limit of $750 

million, including a sub-limit 

of $1.9 million per customer 

for cash above basic SIPC for 

the wrongful abstraction of 

customer funds.

Regulator/Licensor Federal Deposit Insurance 

Corporation (FDIC)

U.S. Securities and 

Exchange Commission

Financial Services Authority 

(FSA), the independent 

regulator of the financial 

services industry in the 

United Kingdom.

*The deposit insurance coverage limits refer to the total of all deposits that an account holder (or account holders) has at each FDIC-insured bank.
IMPORTANT INVESTOR EDUCATION

28

Raymond James has purchased excess SIPC coverage 

through various syndicates of Lloyd’s, a London-based 

firm. Excess SIPC is fully protected by the Lloyd’s trust 

funds and Lloyd’s Central Fund. The additional protection currently provided has an aggregate firm limit of $750 

million, including a sub-limit of $1.9 million per customer 

for cash above basic SIPC for the wrongful abstraction of 

customer funds.

Account protection applies when a SIPC-member firm fails 

financially and is unable to meet obligations to securities 

clients, but it does not protect against market fluctuations. 

It is important to note that balances and products such as 

certificates of deposit (CDs) held at Raymond James Bank 

are covered by the Federal Deposit Insurance Corporation 

(FDIC), subject to FDIC rules and aggregation limits, but 

not by SIPC or excess SIPC. FDIC is an independent agency of the U.S. government that insures bank-held assets up 

to a maximum of $250,000* per depositor ($250,000 for IRAs 

and certain other retirement accounts), including principal and accrued interest. For purposes of calculating the 

$250,000 limit ($250,000 for IRAs and certain other retirement accounts), you would aggregate any accounts, deposits and products you maintain in the same capacity directly 

with Raymond James Bank with any accounts, deposits and 

products you maintain at Raymond James Bank through another intermediary such as Raymond James. 

You are responsible for monitoring the total amount of such 

deposits at Raymond James Bank in order to determine the 

extent of insurance coverage available to you. Neither Raymond James nor any of its affiliates are responsible for any 

insured or uninsured portion of your deposits or CDs.

Further information on FDIC insurance can be obtained 

from your financial advisor, who will provide you the FDIC 

brochure entitled, Your Insured Deposits, FDIC’s Guide 

to Deposit Insurance Coverage, upon request. You can 

also obtain information by contacting the FDIC, Division 

of Supervision and Consumer Protection, at Deposit 

Insurance Outreach, 550 17th Street N.W., Washington, 

DC 20429. The telephone number is 877-275-3342 or 

800-925-4618 (TDD). You may also reach FDIC at its website 

at FDIC.GOV or by e-mail at dcainternet@fdic.gov. You may 

also wish to consult with your own attorney concerning 

FDIC coverage of deposits, particularly when held in more 

than one capacity.

TRADING

Placing Trades

Once your trade is placed, we will do our best to execute 

the transaction at the best available price. Smaller trades 

are generally executed via automated systems at the best 

available price.

You can place a trade by contacting your financial advisor 

or his or her licensed service associate. Please be specific 

and carefully explain your instructions. Ask the person 

to whom you are speaking if he or she will read back your 

instructions for verification. Then, once you receive your 

report confirming your trade (online the day following the 

trade or in hard copy within a few business days of the 

trade), read it carefully to ensure that your instructions were 

carried out. If they were not, please contact your financial 

advisor immediately.

Raymond James or your financial advisor may combine sale 

and purchase orders of securities held by them with similar 

orders being made simultaneously for other accounts if, 

in our reasonable judgment, such aggregation is likely to 

result in an overall economic benefit to the client based 

on an evaluation that the client will benefit from relatively 

better purchase or sale prices, lower commission expenses 

or beneficial timing of transactions, or a combination of 
29

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

these and other potential benefits. Such transactions may 

be made at slightly different prices, due to the volume of 

securities purchased or sold. In such an event, the average 

price of all securities purchased or sold in such transactions 

may be determined and the client may receive the average 

transaction price.

An “average price” per share is reported when multiple 

executions were required to complete your order and is a 

calculated average of the prices of each individual execution. Details regarding the actual price of each execution are 

available upon request. Although multiple executions were 

necessary, no additional fees or commissions were charged.

We are committed to ensuring that you receive the best 

trade execution available in the marketplace at the time an 

order is received. Please consult your financial advisor for 

further details.

Extended-Hours Trading

While certain securities can be traded through Raymond 

James after hours, from 4 p.m. to 9:30 a.m. (ET), investors 

may assume increased risk due to what may be larger than 

normal spreads. Before entering into after-hours trading, 

you are advised to consult with your financial advisor for a 

more complete understanding of the process, including risk 

factors. Additional details related to extended-hours trading 

can be found at raymondjames.com/disclosure_extended_

hours_trading.htm.

Trade Date and Settlement Date

The day on which your trade is executed is the “trade date,” 

while the day on which you must pay for a “buy” trade or 

on which you can expect to be paid for a “sell” trade is the 

“settlement date.” Securities regulations specify three 

business days from trade date to settlement date for most 

securities. This regulation – which our industry calls “T+3” – 

may not provide sufficient time for you to receive the confirmation of your transaction by regular mail and then to pay 

for a buy. You will need to either have funds on deposit with 

us or pay based on verbal confirmation of the trade. The 

vast majority of our clients keep cash balances on deposit 

with us in competitive interest-bearing accounts to settle 

trades automatically.

Online Trading

Raymond James Investor Access provides financial advisors the ability to offer their clients the opportunity to trade 

many investment alternatives online. Before trading online, 

it is important to understand how securities transactions 

are executed, particularly during times of volatile prices 

and high volume, when there may be delays.

SWEEPS (TRANSFERS) TO AND FROM

INCOME-PRODUCING ACCOUNTS

Keeping your cash working hard for you is an important 

goal. We offer alternatives to keep your cash earning income when it is not otherwise invested. If you are purchasing an investment, the automatic sweep feature allows the 

exact amount of the transaction to be transferred to your 

investment account on settlement date, thereby eliminating 

the inconvenience otherwise involved with delivering funds. 

If you are selling an investment, the proceeds are automatically deposited to your account by the day following settlement date, enabling you to begin earning income on those 

funds until they are reinvested.

You should carefully consider the features and benefits of 

each of the available sweep options, including the applicable interest rate or estimated yield, before selecting one 

that is appropriate for your account.

AMENDMENTS TO THE RAYMOND JAMES 

CASH SWEEP PROGRAMS

Raymond James may modify or amend the Cash Sweep op-
IMPORTANT INVESTOR EDUCATION

30

tions and the terms of the Cash Sweeps Programs at any 

time in its sole discretion by providing 30 days’ notice to you.

RAYMOND JAMES BANK DEPOSIT PROGRAM 

With the Raymond James Bank Deposit Program, available 

cash in your Raymond James account is deposited into 

interest-bearing deposit accounts at up to 12 banks, 

providing eligibility for up to $2.5 million in deposit 

insurance coverage ($5 million for joint accounts of two 

or more) by the Federal Deposit Insurance Corporation 

(FDIC), subject to applicable limitations.

Raymond James will deposit up to $245,000 ($490,000 

for joint accounts of two or more) in each bank on a 

predetermined Bank Priority List. Once $2.5 million ($5 

million for joint accounts of two or more) in total has been 

deposited at the banks, or once the available banks reach 

their maximum deposit threshold for cash balances from 

the Bank Deposit Program, there are three options for 

depositing your excess funds, depending upon the sweep 

option you’ve selected.

• Client Interest Program: Excess cash will be directed to 

Raymond James’ Client Interest Program, described 

below, allowing you to take advantage of FDIC insurance, 

and SIPC and excess SIPC coverage. Due to regulatory 

restrictions, this option is not available for custodial 

retirement accounts.

• Eagle Class: JPMorgan US Government: Excess cash 

will be directed to the Eagle Class - JPMorgan US 

Government fund, described below, allowing you to take 

advantage of FDIC insurance, and SIPC and excess SIPC 

coverage. 

• Excess Bank: Excess funds will be directed to a designated 

“excess bank” without limit and without regard to 

maximum-available FDIC coverage. 

Please see “Account Protection” on page 28 for 

more information about FDIC coverage. For more 

information about the Bank Deposit Program, please see 

“Raymond James Bank Deposit Program Disclosures.”

CLIENT INTEREST PROGRAM (CIP) 

The Client Interest Program (CIP) is a short-term alternative 

for funds awaiting investment. As required by the U.S. Securities and Exchange Commission, Raymond James separates a significant portion of CIP funds held for the exclusive 

benefit of clients from funds used in the company’s business 

operations. This portion of CIP funds are, by regulation, required to be placed in overnight repurchase agreements that 

are fully collateralized by U.S. Treasury securities or deposited in qualifying trust and/or cash accounts with major U.S. 

banks. The remaining balance is used in the company’s business operations. CIP balances are included in the coverage 

provided by the Securities Investor Protection Corporation 

(SIPC) and excess SIPC. (Please see “Account Protection” 

for more information on page 28.)

EAGLE CLASS OF JPMORGAN 

MONEY MARKET MUTUAL FUNDS

Other sweep options include the Eagle Class of JPMorgan U.S. 

Government Money Market Fund, Eagle Class of JPMorgan 

Prime Money Market Fund and the Eagle Class of JPMorgan 

Tax Free Money Market Fund, which seeks to achieve income 

that is exempt from federal income tax. The minimum-required 

balance to participate in the automatic cash sweep program 

to these funds is $1,000. Clients with balances less than $50 

in their money market accounts may periodically have their 

balances transferred to non-interest bearing cash positions. If 

the accounts subsequently reach $1,000 in available cash, the 

cash will be swept back to the applicable money market funds. 

The $50 balance transfer and $1,000 minimum policies do not 

apply to qualified retirement accounts. 

Investment in the Eagle Class of JPMorgan money market 

funds is neither guaranteed nor insured by the FDIC or any 

other government agency, although such investments are 

generally eligible for coverage provided by SIPC and excess 
31

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

1

In order to offer you additional protection, Raymond James also offers two combination sweep options:

- Bank Deposit Program with Client Interest Program

- Bank Deposit Program with Eagle Class of JPMorgan U.S. Government

 Each of these sweep options combines the associated features listed in the columns above. Balances are first deposited into the Bank Deposit Program for FDIC insurance coverage. Uninsure 

 cash balances then go to the Client Interest Program or Eagle Class of JPMorgan U.S. Government, respectively, for SIPC and excess SIPC insurance coverage.

2

FDIC insurance covers up to $250,000 per bank, per depositer, per FDIC ownership category. For each ownership category, the Raymond James Bank Deposit Program covers up to $2.5 million in 

cash (joint accounts up to $5 million). Raymond James Bank with Check Writing covers up to $250,000 per depositor. Refer to FDIC.gov for a full description of ownership categories and coverage 

limits when clients have multiple accounts with the same firm.

3

SIPC coverage is up to $250,000 for claims for cash. Once a customer’s SIPC coverage limit is exhausted, excess SIPC provides an aggregate firm limit of $750 million, including a sub-limit of 

$1.9 million per customer for cash above basic SIPC for the wrongful abstraction of customer funds. SIPC and excess SIPC protection of customers with multiple accounts is determined by 

“separate capacity.” Refer to SIPC.org for a full description of coverage limits when clients have multiple accounts with the same firm.

4

Raymond James Bank money market deposit accounts are limited by federal regulations to no more than six withdrawals per month, including Automated Clearing House (ACH), checks and 

point-of-sale transactions

Please note: The process of converting an existing Raymond James account from one sweep alternative to another sweep alternative may result in a loss of dividend/interest for a period of one 

to two days. The duration depends specifically on the existing sweep option and the new alternative selected.

Cash Sweep alternatives can be easily compared using the following table.

Cash Alternative/ 

Feature

Bank Deposit Program1

(with Excess Bank) 

Client Interest 

Program1

(CIP)

Eagle Class of JPMorgan 

U.S. Government

 Money Market Fund1

Eagle Class of

JPMorgan Tax Free 

Money Market Fund

Eagle Class of 

JPMorgan Prime

 Money Market Fund

Raymond James Bank 

with Check Writing

Description

Available cash in your 

Raymond James account 

is deposited into interestbearing accounts at up to 

12 banks. 

The Client Interest 

Program (CIP) is a 

short-term alternative 

for client cash that 

is held for future 

investment. 

Money market fund that seeks 

high current income with liquidity 

and stability of principal. The fund 

invests exclusively in high-quality, 

short-term securities that are 

issued or guaranteed by the U.S. 

government or by U.S. government 

agencies and instrumentalities

Money market mutual 

fund that aims to provide 

the highest possible 

level of current income, 

which is excluded from 

gross income, while still 

preserving capital and 

maintaining liquidity

Taxable money market 

mutual fund that aims to 

provide the highest possible 

level of current income while 

still maintaining liquidity 

and preserving capital

Standard bank money 

market deposit account 

with check writing 

(retirement accounts only)

Current Rate/

Yield See RAYMONDJAMES.COM/RATES.HTM

Rate/Yield Calculation 

Method and Frequency

Based on relevant 

competitive money 

market rates and

various market factors. 

Rate set periodically.

Based on relevant 

competitive money 

market rates and 

various market factors. 

Rate set periodically.

Based on yield of underlying 

investment less expenses of 

managing the fund. 

Yield calculated daily.

Based on yield of 

underlying investment 

less expenses of managing 

the fund. 

Yield calculated daily.

Based on yield of underlying 

investment less expenses of 

managing the fund. 

Yield calculated daily.

Based on relevant 

competitive money 

market rates and various 

market factors. Rate set 

periodically.

Rate/Yield

For balances of

less than $5,000:

standard rate;

$5,000 or more:

standard or premium rate, 

based on assets

For balances of

less than $5,000:

standard rate;

$5,000 or more:

standard or premium 

rate, based on assets

$1,000 required to establish 

(minimum waived for ERISA 

and IRA accounts)

$1,000 required to 

establish (not available 

for ERISA and 

IRA accounts)

$1,000 required to 

establish (minimum waived 

for ERISA and IRA accounts)

For balances of

$5,000 or more: 

 standard rate 

less than $5,000:

 standard rate less 

approximately 1.5%

Insurance Type FDIC SIPC and excess SIPC SIPC and excess SIPC SIPC and excess SIPC SIPC and excess SIPC FDIC

Coverage Amounts

Up to $2.5 million for 

individual accounts

($5 million for joint 

accounts)2

Up to $250,000 for 

basic SIPC and $1.9 

million for excess 

SIPC3

Up to $500,000 for basic SIPC and 

up to a firm aggregate of $750 

million for excess SIPC3

Up to $500,000 for basic 

SIPC and up to a firm 

aggregate of $750 million 

for excess SIPC3

Up to $500,000 for basic 

SIPC and up to a firm 

aggregate of $750 million 

for excess SIPC3

Up to $250,000 for 

individual accounts

($500,000 for joint 

accounts)

Availability of Funds Same day Same day Same day with 

3 p.m. cut-off

Same day with 

3 p.m. cut-off

Same day with 

3 p.m. cut-off Next day

Check Writing 

Available

Through Capital

Access only

Through Capital

Access only

Through Capital

Access only

Through Capital

Access only

Through Capital

Access only

Yes, limited by regulation 

to six checks per month

Automated Clearing 

House (ACH) Available Yes Yes Yes Yes Yes Yes4

More

Information See RAYMONDJAMES.COM/RATES.HTM
IMPORTANT INVESTOR EDUCATION

32

SIPC. (Please see “Account Protection” on page 28.) While 

these funds seek to preserve the value of your investment at 

$1 per share, it is possible to lose money by investing in the 

funds. Investors should carefully consider the investment 

objectives, risks, charges and expenses of the Eagle Class of 

JPMorgan money market funds before investing. The prospectus contains this and other information about these funds. The 

prospectus is available from your financial advisor and should 

be read carefully before investing.

Cash management features are available for all of the above 

sweep options through the Capital Access Account. These 

features include check writing, debit cards, online bill payment and ACH. For more information regarding Capital Access, please contact your financial advisor.

RAYMOND JAMES BANK WITH CHECK WRITING

Available only to clients who have retirement accounts with 

check writing capabilities, this sweep option allows for cash 

to be transferred to and from your investment account to an 

individually named account held directly at Raymond James 

Bank. The balances held in individual named accounts at the 

bank are also FDIC-insured in accordance with FDIC rules 

and aggregation limits. (Please see “Account Protection” 

for more information on page 28.)

RAYMOND JAMES BANK DEPOSIT 

PROGRAM DISCLOSURES 

Through the Raymond James Bank Deposit Program, available cash in your Raymond James account is deposited into 

interest-bearing deposit accounts at one or more banks set 

forth on a priority list, as described below. 

How the Bank Deposit Program Works 

Deposit Procedures – When funds are first available for 

deposit, Raymond James, as your agent, will open a Money 

Market Deposit Account (MMDA) and a linked Transaction 

Account (TA) on your behalf at one or more banks, as set 

forth on the then-current priority list in the order set forth on 

the priority list. Once your funds in the deposit accounts at a 

bank reach the applicable deposit limit of $245,000 ($490,000 

for joint accounts of two or more), or once the bank reaches 

its deposit threshold for cash balances from the Bank Deposit Program, Raymond James, as your agent, will open an 

MMDA and TA for you at the next bank on the priority list 

and place your additional funds in that bank. Following this 

process, your funds will be swept into deposit accounts at 

up to 12 banks, providing eligibility for up to $2.5 million in 

deposit insurance coverage by the FDIC ($5 million for joint 

accounts of two or more), subject to applicable limitations.

Each bank on the priority list has a maximum deposit capacity, 

or “deposit threshold,” that designates the maximum dollar 

value the bank will accept as deposits associated with the 

Bank Deposit Program. In the event that you have deposits 

equal to the applicable FDIC deposit limit – and/or the bank 

has reached its deposit threshold – at each of the available 

banks on the priority list, additional funds will be directed, 

according to your cash sweep program election, to either the 

Client Interest Program, which is protected by the Securities 

Investor Protection Corporation (SIPC) and excess SIPC, 

or to a designated “excess bank” without limit and without 

regard to maximum-available FDIC insurance coverage.

Withdrawal Procedures – As necessary to satisfy withdrawals, funds will be transferred from your MMDA to the related 

TA at each bank and withdrawals will be made from the TA. 

The bank and Raymond James, in their discretion, may determine a minimum, or “threshold,” amount to be maintained 

in your TA to satisfy debits in your Raymond James account. 

Federal banking regulations limit the transfers from an 

MMDA to a total of six (6) during a monthly statement cycle. At any point during a month in which transfers from an 

MMDA at a bank have reached the applicable limit, all funds 

will be transferred from that MMDA to the linked TA at the 
33

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

bank until the end of the month. Deposits for the remainder 

of the month into this bank will be made to the TA. At the 

beginning of the next month, funds on deposit in the TA will 

be transferred to the MMDA, minus any threshold amount 

to be maintained in the TA. The limits on MMDA transfers 

will not limit the number of withdrawals you can make from 

funds on deposit at a bank or the amount of FDIC insurance 

coverage for which you are eligible.

Interest – The Raymond James standard rate will apply to 

accounts with a cash balance of less than $5,000. Accounts 

with $5,000 or more in cash may receive a premium rate 

based on their household relationship asset value. Rates are 

posted daily on Raymond James’ website at raymondjames.

com/rates.htm and are also available by contacting your 

financial advisor. Your interest rate may change as often 

as daily depending on the balance held in your Raymond 

James account.

Interest will accrue on deposit account balances from the 

day funds are deposited into the deposit accounts at a bank 

through the business day preceding the date of withdrawal 

from the deposit accounts at the bank. Interest will be 

compounded daily and credited monthly.

Your MMDA and TA at each bank will earn the same interest 

rate and all banks will pay the same interest rate. The 

interest rates on the deposit accounts will be determined 

by the amount the banks are willing to pay on the deposit 

accounts minus the fees paid to Raymond James and other 

parties as set forth below under “Fees.” Interest rates 

on the deposit accounts will vary based upon prevailing 

economic and business conditions. The banks do not have 

a duty to offer the highest rates available. The interest 

rates paid with respect to the deposit accounts at a bank 

may be higher or lower than the interest rates available 

to depositors making deposits directly with the bank or 

other depository institutions in comparable accounts and 

for other sweep alternatives. You should compare the 

terms, interest rates, required minimum amounts and other 

features of the Bank Deposit Program with other accounts 

and alternative investments.

For most clients, interest earned from the deposit accounts 

will be taxed as ordinary income in the year it is received. 

Form 1099 will be sent to you each year showing the amount 

of interest income you have earned in your deposit accounts. You should consult with your tax advisor about how 

the deposit account sweep affects you.

Reporting – You will not receive trade confirmations. 

All transactions in your deposit accounts will be confirmed 

on your Raymond James account statement. 

For each statement period, your Raymond James account 

statement will reflect:

• All deposits to and withdrawals from your 

deposit accounts,

• The opening and closing balances of the deposit 

accounts at each bank,

• The interest rate and interest earned on deposit 

account balances, and

• The list of banks you declined to receive your funds.

Your financial advisor can assist you in understanding your 

Raymond James account statement. Responsibility for the 

accuracy of your statement is Raymond James’, not the priority list banks.’

Bank Priority List

Raymond James establishes contracts with multiple banks, 

which are included in one or more Bank Priority Lists. The 

priority list of available banks into which your funds may be 

deposited is based on your account’s legal address of record. 

The current Bank Priority Lists are available at raymondjames.

com/rjbdp or from your financial advisor.
IMPORTANT INVESTOR EDUCATION

34

Each priority list includes one or more designated “excess 

banks,” which will accept funds without limit and without regard to maximum-available FDIC coverage for clients who 

have chosen to have excess funds directed to an excess bank. 

If all of your funds are withdrawn from an excess bank, your 

funds may be deposited in a different excess bank the next 

time your funds are available for deposit in an excess bank.

For clients who have chosen to have excess funds directed 

to the Client Interest Program (CIP), if all banks on the priority list have received your funds up to the applicable FDIC 

deposit limit and/or the banks have reached their deposit 

thresholds, your next available funds will be deposited in CIP 

and covered by SIPC and excess SIPC insurance, not FDIC.

For clients who have chosen to have excess funds directed 

to the Eagle Class - JPMorgan US Government fund, if all 

banks on the priority list have received your funds up to the 

applicable FDIC deposit limit and/or the banks have reached 

their deposit thresholds, your next available funds will be deposited in the Eagle Class - JPMorgan US Government fund 

and covered by SIPC and excess SIPC insurance, not FDIC.

Excluding Priority List Banks – You should review the Bank 

Priority List carefully. While you may not change the order of 

the banks on the priority list, you may, at any time, designate 

a bank, including any excess bank, as ineligible to receive 

your funds. This will result in your funds being deposited into 

deposit accounts at the next bank on the priority list.

In addition, you may at any time instruct us to remove your 

funds from a bank, close your deposit accounts with the bank 

and designate the bank as ineligible to receive future deposits. Unless you direct us to place your funds in a different 

investment, your funds from a closed deposit account will be 

deposited in deposit accounts at the first available bank set 

forth on the priority list, as amended by you.

You may not designate all of the excess banks as ineligible 

to receive your funds. If you wish to designate a bank as ineligible to receive your funds, please contact your financial 

advisor. The list of ineligible banks will be displayed on your 

Raymond James account statement as “Participating banks 

you declined.”

Changes to the Bank Priority List – The Bank Priority List may 

change at any time. One or more of the banks included on 

the priority list may be replaced with a bank not previously 

included on the priority list, a bank may be added to or deleted from the priority list, or the order of banks on the priority list may change. When a new bank is added to the program, the priority lists available at raymondjames.com/rjbdp 

are updated, and the bank will be listed under “Participating 

banks recently added” in your next Raymond James account 

statement. If a bank at which you have deposit accounts discontinues participation in the Bank Deposit Program, your 

funds will be transferred to the next available bank on the 

priority list.

Your Relationship with Raymond James 

and the Priority List Banks 

Relationship with Raymond James – Raymond James is 

acting as your agent in establishing the deposit accounts 

at each bank, depositing funds into the deposit accounts, 

withdrawing funds from the deposit accounts and transferring funds among the deposit accounts. Deposit account 

ownership will be evidenced by a book entry on the account 

records of each bank and by records maintained by Raymond James as your custodian. No evidence of ownership, 

such as a passbook or certificate, will be issued to you. Your 

brokerage account statements will reflect the balances in 

your deposit accounts at the banks. You should retain your 

brokerage account statements for your records. You may at 

any time obtain information about your deposit accounts by 

contacting your financial advisor.
35

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

Unless you establish the deposit accounts directly with a 

bank as described below, all transactions with respect to 

your deposit accounts must be directed by Raymond James 

and all information concerning your deposit accounts can 

only be obtained from Raymond James. The banks have no 

obligation to accept instructions from you with respect to 

your deposit accounts or to provide you information concerning your deposit accounts.

Raymond James may, in its sole discretion, terminate your 

use of the deposit accounts as a sweep investment option. 

If Raymond James terminates your use of the deposit accounts as a sweep investment option, you may establish a 

direct depository relationship with each bank, subject to 

their rules with respect to maintaining deposit accounts.

Similarly, if you decide to terminate your participation in 

the Bank Deposit Program, you may establish a direct relationship with each bank by requesting to have your deposit 

accounts established in your name at each bank, subject 

to each bank’s rules with respect to establishing and maintaining deposit accounts. 

Establishing your deposit accounts in your name at a bank 

will separate the deposit accounts from your Raymond 

James account. Your deposit account balances will no longer be reflected in your Raymond James account statement 

and Raymond James will have no further responsibility 

concerning your deposit accounts.

Relationship with the Priority List Banks – You will not have 

a direct account relationship with the banks on the priority 

list: Raymond James, as your agent, will establish the 

deposit accounts for you at each bank and make deposits to 

and withdrawals from the deposit accounts. However, each 

deposit account constitutes an obligation of a bank and is 

not directly or indirectly an obligation of Raymond James. 

You can obtain publicly available financial information about 

each bank at ffiec.gov/nic or by contacting the FDIC Public 

Information Center by mail at L. William Seidman Center, 

Virginia Square, 3501 North Fairfax Drive, Arlington, VA 

22226 or by phone at 703-562-2200. Raymond James does not 

guarantee in any way the financial condition of the banks or 

the accuracy of any publicly available financial information 

about the banks.

Fees – Each bank, except Raymond James Bank, will pay 

Raymond James a fee equal to a percentage of the average daily deposit balance in your deposit accounts at the 

bank. The fee paid to Raymond James may be an annual 

rate of up to an average of 2% as applied across all deposit 

accounts taken in aggregate. In its discretion, Raymond 

James may reduce its fee and may vary the amount of the 

reductions between clients. The fee may vary from bank to 

bank. The amount of the fee received by Raymond James 

will affect the interest rate paid on your deposit accounts. 

Raymond James Bank will pay Raymond James a fixed fee 

per account.

In addition, other service providers will receive fees from 

each bank and your financial advisor may receive a portion 

of the fee paid to Raymond James by the banks. Other than 

the applicable fees imposed on your brokerage account, 

there will be no charges, fees or commissions imposed on 

your brokerage account with respect to deposit accounts at 

the priority list banks.

Upon request, Raymond James will provide you information 

about Raymond James’s compensation arrangements with 

respect to its sweep investments. 

Insurance Coverage

Any deposits (including certificates of deposit) that you 

maintain in the same capacity directly with a bank, or 

through an intermediary (such as Raymond James or another broker), will be aggregated with deposits in your deposit 
IMPORTANT INVESTOR EDUCATION

36

accounts at the bank for purposes of the maximum applicable deposit insurance amount (up to $250,000 per depositor; 

visit FDIC.GOV for more information). You are responsible 

for monitoring the total amount of deposits that you have 

with each bank, including an excess bank (described in the 

“Bank Priority List” section of this disclosure), in order to 

determine the extent of FDIC deposit insurance coverage 

available to you. 

The information provided in this disclosure applies, unless 

otherwise indicated, to each Raymond James account for 

which you are a client of record, whether as an individual, 

joint tenant, trustee, executor, custodian or in any other 

capacity, and is furnished to you in each of such capacities 

in respect of all such accounts. Further information about 

FDIC insurance, as well as SIPC and excess SIPC, is available in the “Your Account Is Protected” section or through 

your financial advisor. 

SERVICING YOUR ACCOUNTS

TRANSFERRING YOUR ACCOUNT 

TO RAYMOND JAMES

Raymond James helps clients expedite the transfer of securities by offering advice and assistance, identifying the 

forms required by the appropriate transfer agents, and 

facilitating the transfer of any security for legal or estate 

purposes. Clients are assured that their transactions are 

handled from start to finish as swiftly, efficiently and professionally as we can arrange. 

Compensation to Transferring Financial Advisors

Periodically, when a financial advisor transfers from one 

firm to another, he or she may receive compensation from 

his or her new firm. The “up front bonus” transition allowance or other incentive compensation is designed to offset the initial loss of income resulting from client accounts 

that may not choose to transfer to the new firm and for time 

spent re-establishing his or her practice at the new firm, as 

well as to induce financial advisors to change firms.

THE BENEFITS OF STREET NAME ACCOUNTS

By having securities held in “street name” through Raymond 

James & Associates, your recordkeeping can be simplified 

and your responsibility to deliver sold securities eliminated. 

Additionally, all dividends and interest payments are 

made directly to Raymond James & Associates and 

promptly credited to your account for reinvestment or your 

personal use, while the proceeds of sales are promptly and 

automatically credited to your account.

All securities held in street name by Raymond James, along 

with all activities related to those securities, are reported on 

your Raymond James client statement. Added conveniences 

include the ability to make one address change to Raymond 

James rather than notifying separate transfer agents for 

each security, ease in transferring securities to heirs by 

completing a single copy of the required documents and 

access to the loan potential of your eligible portfolio through 

our margin program.

CREDITING CHECKS TO AN ACCOUNT

All checks – except cashier’s checks, traveler’s checks and 

money orders – deposited with Raymond James are subject 

to a minimum two-day hold. All deposits processed through 

the ATM (automated teller machine) network are subject 

to a two-day minimum hold. Certain checks, based upon 

size, account history and other factors, may be held up to 

10 business days. Credit card or line of credit checks are 

subject to a 20-business-day hold. With the exception of 

foreign checks, all checks begin to earn interest after two 

business days.

Foreign checks, including those from Canadian banks, are 

not accepted for payment of a trade and are not credited to a 

client’s account until funds are received by Raymond James 

& Associates. This may take one to six weeks. Please always 

make your checks payable to Raymond James & Associates 
37

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

and include your account number. Financial advisors are 

required to have clients make checks payable to the firm. 

Do not make checks payable to a financial advisor or any 

other entity, as we cannot be responsible for these funds.

SPEEDY ACCESS TO YOUR DIVIDENDS 

AND INTEREST PAYMENTS

While dividend and interest payments are credited to client 

accounts on the declared payment date, clients do have choices 

as to how they receive those payments.

Currently, many clients choose to receive dividend and interest payments by check or direct deposit to their bank accounts 

through the Automated Clearing House. Most prefer to have 

the payments automatically sweep into an interest-bearing 

account, which eliminates the need to cash checks or deliver 

them to another institution for deposit. It also eliminates 

possible delays due to “holds” placed on the funds when 

the checks are deposited in another institution and delays 

due to the postal service. In addition, by sweeping, clients 

begin earning competitive rates of interest on their payments 

immediately. Each interest and dividend payment and subsequent sweep is also automatically reported on the client’s 

account statement.

While funds are immediately available when credited, checks 

are processed and mailed by Raymond James each Friday. 

Those checks include all dividend and interest payments 

credited to an account during the previous week and are sent 

if total payments exceed $100 or they will accumulate in the 

client’s account until the $100 threshold is reached, at which 

time a check will be issued. Clients who receive dividend and 

interest payments by check will receive a breakdown of the 

payments included on each check.

Your financial advisor can assist you in selecting the best 

method for you to access your interest and dividends.

The Dividend Reinvestment Alternative

For investors who would like to automatically buy additional 

shares of the underlying stock with each cash dividend, we 

offer a dividend reinvestment program. The option is available on most equity and closed-end fund shares traded 

on the New York Stock Exchange, the American Stock 

Exchange or the National Market System of the NASDAQ.

The program is offered free of charge on an unlimited 

number of securities. Benefits include consolidation of 

assets, estate simplification and loan eligibility. Street 

name dividend reinvestment offers ease of liquidation of 

all full and fractional shares with one simple instruction to 

your financial advisor. No lengthy and cumbersome interaction with various agents is required.

YOUR RIGHTS AS A SHAREHOLDER

Through investments in individual stocks and mutual funds, 

you become a shareholder, or an owner in a business with 

a voice in how that business is run. As a shareholder, you 

have the right to all financial reports issued by that company 

as well as the right to vote – either in person or by proxy – 

and speak at the annual meeting. You also have the right 

to call the company at any time to ask questions. Whether 

you hold the certificates or we keep them for you in “street 

name,” you maintain the same rights.

THE PITFALLS OF PENNY STOCKS

As a rule, we will not execute purchases for stocks under 

$2 per share, unless that stock is traded on a major stock 

exchange or the NASDAQ system. Our reason is simple. In 

almost all cases, adequate financial information is available 

on stocks that trade on an exchange or NASDAQ, facilitating analysis of the security prior to purchase. Stocks 

that are trading under $2 per share and are not listed on an 

exchange or NASDAQ generally are riskier, as the companies are smaller and do not necessarily have the same 

reporting requirements as listed stocks.

UNDERSTANDING THE OTC MARKET

The volume of orders in over-the-counter stocks has 
IMPORTANT INVESTOR EDUCATION

38

increased dramatically as most U.S. securities trade in that 

market. However, not understanding some basics of the 

OTC market can cause problems for investors.

Because most of these are smaller companies, their market capitalizations are generally smaller and the stocks are 

less liquid, creating a larger spread between the stock’s bid 

and ask prices. Furthermore, it will take longer to get pricing reports, as market makers often only make 100-share 

markets before changing their bid and ask. As a result, even 

a market order at a market opening might take a long time to 

execute at a series of prices, which would not happen in a 

large company stock listed on an exchange.

CONFLICT RESOLUTION

Almost all client complaints are resolved quickly as a result 

of discussions with financial advisors or other associates 

at our firm. However, experience indicates that some misunderstandings can and will occur. A client’s first communication should be directed to his or her financial advisor. In 

the event that satisfaction is not promptly received at that 

level, the branch manager should then be contacted.

If the client is still dissatisfied, he or she should contact our 

international headquarters. In the case of Raymond James 

& Associates, clients should contact Client Services at 

800-647-SERV (7378) for operational problems dealing with 

confirmations, statements, deliveries, etc. If the problem 

deals with an investment or unsatisfactory service from an 

associate of the company, inquiries should be directed to 

the Compliance Department at 800-248-8863 or 880 Carillon 

Parkway, St. Petersburg, FL 33716.

For clients of Raymond James Financial Services, international headquarters inquiries should be directed to the 

Raymond James Financial Services Compliance Department at 800-248-8863, ext. 73016 or 880 Carillon Parkway, St. 

Petersburg, FL 33716.

Our headquarters is open weekdays, with the exception 

of national holidays when the stock market is closed, from 

8:30 a.m. to 5:30 p.m. ET.

THE PATRIOT ACT

Under the USA Patriot Act, Raymond James is required 

to set up an anti-money-laundering program, designate 

a special compliance officer, set up employee training, 

conduct independent audits, and establish policies and 

procedures to detect and report suspicious transactions 

and ensure compliance with the law. As part of our required 

program, we may ask you to provide various identification 

documents or other information in order to comply with 

this law. Until you provide the information or documents we 

need, we may not be able to open an account or effect any 

transactions for you.

ENSURE YOUR ACCOUNT 

INFORMATION IS UP-TO-DATE

While laws governing unclaimed or abandoned property 

vary by state, Raymond James must remit client property 

to state authorities if an account has been inactive for a 

specified period and we are unable to make contact with 

the account owner. For this reason and to help ensure the 

confidentiality of your accounts, please be sure to inform 

your financial advisor of any changes to your personal 

information, including your correct addresses.

If you need to make changes to your account, please contact 

your financial advisor or Client Services at 800-647-SERV

(7378) to provide your current address information so that 

we may update our records.

STATEMENT OF CREDIT DISCLOSURE

Cash accounts

Cash accounts may be subject, at Raymond James & Asso-
39

IMPORTANT INVESTOR EDUCATION IMPORTANT INVESTOR EDUCATION

ciates’ discretion, to interest on any debit balances resulting 

from failure to make payment in full for securities purchased, 

from proceeds of sales paid prior to settlement date or for 

other charges that may be made to the account.

Margin accounts

Purchases of securities on credit, commonly known as margin purchases, enable you to increase the buying power of 

your equity and thus increase the potential for profit or loss. 

A portion of the purchase price is deposited when buying 

securities on margin, and Raymond James & Associates extends credit for the remainder. This loan appears as a debit 

balance on your monthly statement of account. Raymond 

James & Associates charges interest on the debit balance 

and requires you to maintain securities, cash or other property to secure repayment of funds advanced.

Interest will be charged for any credit extended to you for 

the purpose of buying, trading or carrying any securities, for 

any cash withdrawals made against the collateral of securities, or for any other extension of credit. When funds are paid 

in advance of settlement on the sale of securities, interest 

will be charged on such amount from date of payment until 

settlement date. In the event that any other charge is made 

to the account for any reason, interest may be charged on the 

resulting debit balances.

Interest rates

Interest charged on any debit balances in cash accounts or 

credit extended in margin accounts may be up to 2.75 percentage points above the Raymond James & Associates 

Base Lending Rate. The Raymond James & Associates Base 

Lending Rate will be set with reference to commercially recognized interest rates, industry conditions relating to the 

extension of credit and general credit market conditions. 

The Raymond James & Associates Base Lending Rate may 

change without prior notice. When the Raymond James & 

Associates Base Lending Rate changes during an interest 

period, interest will be calculated according to the number 

of days each rate is in effect during that period. If the rate of 

interest charged to you is changed for any other reason, you 

will be notified at least 30 days in advance.

Interest period

Margin interest will post to your account on the last business 

day of the month. The interest period begins on the prior 

month’s posting date and ends the day before the last business day of the month.

Method of interest computation

At the close of each interest period during which credit 

was extended to you, an interest charge is computed by 

multiplying the average daily debit balance by the applicable 

schedule rate and by the number of days during which a debit 

balance was outstanding and then dividing by 360. If there 

has been a change in the Raymond James & Associates 

Base Lending Rate, separate computations will be made 

with respect to each rate of charge for the appropriate 

number of days at each rate during the interest period. The 

interest charge for credit made to your account at the close 

of the interest period is added to the opening debit balance 

for the next interest period unless paid. Raymond James & 

Associates Base Lending Rate agreements are governed by 

the laws of the state of Florida.

If there is a credit in the cash account and there is a debit in 

the margin account, interest will be calculated on the resulting net balance.

If the security you sold short (or sold short against the box) 

appreciates in market price over the selling price, interest 

will be charged on the appreciation in value. Correspondingly, if the security you sold depreciates in market price, the 

interest charged will be reduced since your average debit 

balance will decline. This practice is known as “marking to 

the market.” The daily closing price is used to determine any 

appreciation or depreciation of the security sold short.

If your account is short shares of stock on the record date 

of a dividend or other distribution, however such short posi-
IMPORTANT INVESTOR EDUCATION

40

tion occurs, your account will be charged the amount of the 

dividend or other distribution on the following business day.

General Margin Policies

The amount of credit that may be extended by Raymond 

James & Associates and the terms of such extension 

are governed by rules of the Federal Reserve Board and 

the Financial Industry Regulatory Authority. Within the 

guidelines of these rules and subject to adjustment 

required by changes in such rules and our business 

judgment, Raymond James & Associates establishes 

certain policies with respect to margin accounts. If the 

market value of securities in a margin account declines, 

Raymond James & Associates may require the deposit of 

additional collateral. Margin account equity is the current 

market value of securities and cash deposited as security, 

less the amount owed Raymond James & Associates for 

credit extended. It is our general policy to require margin 

account holders to maintain equity in their margin accounts 

of the greater of 30% of current market value or $3 per share 

for the common stock purchased on margin. Raymond 

James & Associates applies other standards for other 

types of securities. For example, securities valued at $5 per 

share or less may not be purchased using margin except 

under exceptional circumstances. The granting of approval 

for purchases of securities under $5 in the margin account 

will be at Raymond James & Associates’ sole discretion. 

Also certain securities may be ineligible for margin credit 

from time to time. For information with respect to general 

margin maintenance policy as to municipal bonds, corporate 

bonds, listed U.S. Treasury notes and bonds, and other 

securities for margin credit, please contact Raymond James 

Financial Services.

Notwithstanding the above general policies, Raymond 

James & Associates reserves the right, at its discretion, to 

require the deposit of additional collateral and to set required 

margin at a higher or lower amount with respect to particular 

accounts or classes of accounts as it deems necessary. In 

making these determinations, Raymond James & Associates may take into account various factors, including the size 

of the account, liquidity of position, unusual concentrations 

of securities in an account or a decline in creditworthiness. 

If you fail to meet a margin call in a timely manner, some or 

all of your positions may be liquidated by Raymond James & 

Associates without prior notification.

Deposits of collateral, lien on accounts and liquidation

In the event that additional collateral is requested, you may 

deposit cash or acceptable securities into your margin account. If satisfactory collateral is not promptly deposited after a request is made, Raymond James & Associates may, 

at its discretion, liquidate securities held in any of your accounts. In this connection, pursuant to our Margin Agreement, Raymond James & Associates retains a security interest in all securities and other property held in your accounts, 

including securities held for safekeeping, so long as any 

credit extended remains outstanding.
INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER

880 CARILLON PARKWAY // ST. PETERSBURG, FL 33716 // 800.248.8863

RAYMONDJAMES.COM

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