TORONTO -- Questrade Wealth Management will pay $2.9 million to the Ontario Securities Commission after regulator staff concluded that the investment manager failed to properly determine whether there was a conflict of interest before investing a client's money.

According to Questrade's settlement with the OSC, the Toronto-based investment fund manager and market dealer acted contrary to the public interest when it purchased roughly $15 million in WisdomTree exchange-traded funds for Questrade's managed online investment service Portfolio IQ in July 2017.

The settlement says Questrade was required to determine whether there was a conflict of interest before making this significant purchase, as one day earlier on July 27, 2017 it had entered into three strategic agreements with Wisdom Tree Asset Management Canada.

Under the agreements, WisdomTree agreed to purchase eight ETFs managed by Questrade, and WisdomTree's affiliate was to become a consultant for Portfolio IQ.

The OSC settlement, approved in a hearing today, says that Questrade did not take the appropriate steps to determine whether the July 2017 trade was suitable for its clients, which "potentially put its PIQ clients at risk."

The regulator says Questrade has agreed to the terms of the settlement, which was approved Tuesday, which includes a voluntary payment of $2.9 million to the commission and costs totalling $100,000.