The latest compliance issues in wealth management across North America.

SEC
The Securities and Exchange Commission has fined Lockwood Advisors $200,000 for not telling clients about the costs linked to trading in wrap accounts, media reports said. The SEC also imposed a cease and desist order on the firm, which provides money management wrap programs that are used by advisors and broker/dealers.

An order by the SEC, issued earlier this week, said that from 2008 through 2018, some of the trading costs paid by Lockwood's clients were not covered by the annual wrap fee. These costs included portfolio managers trading through a broker-dealer that was not part of the wrap program, reports said.

With such programs, investments are usually overseen by third-party managers and clients pay an annual fee to a sponsor and portfolio managers for various services, such as advisory and custody.

Fees can range from 1 to 3 per cent, depending on the percentage of client assets under management.