Finra aims to hike fees due to 'significant loss'

Finra aims to hike fees due to 'significant loss'
After incurring a 'signficant loss' in 2011, Finra plans to raise a number of user fees. How big a hit will B-Ds take? The hikes will range anywhere from 5% to 50%.
MAY 01, 2012
By  DJAMIESON
The Financial Industry Regulatory Authority Inc. plans to hike a number of user fees it charges broker-dealers to help cover a "significant loss" from last year, said chief executive Richard Ketchum. "The broader economic downturn continues to affect trading volumes and industry revenues, which in turn has led to a decrease in Finra's revenues and resulted in a significant loss for fiscal year 2011," Mr. Ketchum said in an e-mail to member firms Monday. As a result, "we are proposing adjustments to a number of user-based fees, all of which have remained static for more than five years," Mr. Ketchum wrote. The fee hikes would help "ensure that we are sufficiently capitalized to meet our regulatory responsibilities," he said in the message. Mr. Ketchum didn't specify how much Finra lost last year. Finra spokeswoman Nancy Condon said the amount will not be available until the self-regulator files its audited results in the next few months. For this year, Finra will be proposing a hike fees for advertising reviews, corporate financing and new-member applications, Mr. Ketchum told members. In addition, a 25% increase in the trading activity fee will be proposed. For next year, Finra will propose an unspecified "regressive tiered rate" for branch office assessments, and hikes in various registration and disclosure fees. Overall, the proposed hikes range from around 5% to 50%. The fee hikes are needed despite $36 million in spending reductions that were implemented in Finra's 2012 budget, Mr. Ketchum said. A new board-level pricing working group and Finra's small-firm advisory board have offered input on the changes, Mr. Ketchum added. "None of us welcome fee increases, but we understand the rationale," said Mark Cresap, chairman of the small firm advisory board and president of Cresap Inc.

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.