Live! OneVoice2013: FSI cautions Finra about bonus disclosure proposal

Group calls $50K threshold 'arbitrary,' says plan overlooks other comp

Jan 29, 2013 @ 2:11 pm

By Frederick P. Gabriel Jr.

The main trade group representing independent-contractor broker-dealers will soon go public with its concerns over a Financial Industry Regulatory Authority Inc. proposal to require brokers to disclose recruiting incentives.

While the Financial Services Institute Inc. has yet to file an official comment letter on the proposal, the group has identified three main areas of concern, said David T. Bellaire, the organization's general counsel.

The rule, which was proposed Jan. 3, would require registered representatives to disclose details of their enhanced-compensation arrangements to any customers they solicit for a period of one year after changing firms.

Enhanced compensation — which includes signing bonuses, upfront or back-end bonuses, loans, accelerated payouts, transition assistance and similar arrangements — in an amount less than $50,000 would not have to be disclosed.

In the comment letter it plans to file, the FSI will argue that the $50,000 threshold is "arbitrary," Mr. Bellaire said Tuesday at the FSI's annual meeting in San Diego.

The proposal also fails to adequately distinguish between bonus compensation and compensation that is more "transitional" in nature, such as automated customer account transfer fees, Mr. Bellaire said.

Finally, the Finra proposal also overlooks other forms of compensation that present similar conflicts, such as retention bonuses, he said.

The comment period for the proposed rule change, which is known as RN 13-02, ends March 5.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Children of AI, and when they are coming to financial advice

Technology reporter Ryan Neal talks about the tremendous progress in artificial intelligence in other industries, and how its applications are slowly making headway in the advice sector.

Latest news & opinion

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

SEC advice proposal unveiling: Here's what to expect

Chairman Jay Clayton will initiate momentous action Wednesday, as the commission meets to debate a rule on broker and adviser standards.

How active are the largest actively managed funds?

Active-share measures for the 15 largest actively traded mutual funds.

Morgan Stanley's success looks long in the tooth to analyst

Sanford C. Bernstein & Co. analyst Christian Bolu, concerned over stalled adviser growth and what it means for lending and deposit growth, believes the stock will "under perform."

Retirement coverage gap, 401(k) rollovers are big emerging threats for plan advisers

Proliferation of state retirement programs approaching the 'tipping point' where it will lead the federal government to step in.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print