The Securities Litigation Expert Blog

Brokers Switching firms May Have to Disclose Bonuses

Posted by Jack Duval

Dec 2, 2012 5:09:01 AM

Finra is looking into conflicts of interest of brokerages and their Registered Representatives, Reuters reports.  (Reuters)  These concerns were raised by Finra VP Susan Axelrod in October, at an industry conference.

Among the concerns, Axelrod said in October, are that brokers who receive large financial incentives to move to a different firm may promise their clients new and better securities products for bringing their assets to the new firm.  Those products may be no better, or even worse, than what the client already owns, but the broker earns a commission on the sale.  FINRA's proposal would apply to clients who transfer their accounts to a brokerage in order to stay with an adviser who is switching firms. Brokerages would have to tell those clients about compensation used to entice the broker's move.

 
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Topics: FINRA, bonus, Susan Axelrod, disclosure, Compliance, Reuters

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