April 15, 2014
In response to the SECs request for comments on proposed rule FINRA 2243. My comment comes in the form of a question: What kind of meaningful information would a client obtain from knowing that their broker received an upfront bonus of: $1,000,000-$2,000,000? Is the trailing 12 (T12) is based on commissions, fees, trailers on mutual funds, AUM? Raw numbers provided to clients do not and cannot provide clarity into why a broker moves firms or if following that broker would be harmful to their financial picture.
Providing clients with the amount of transfer fees charged to move an account and the existence of non-transferable securities are very valuable pieces of information and should be disclosed.
While reviewing comments from FINRAs previous version of this rule, I find it interesting that the only entities in favor of FINRA proposed Rule 2243 are either non industry organizations or firms that don’t offer enhanced compensation packages.
FINRAs proposal to require brokers to disclose compensation packages to client just sounds like sour grapes to me.
*Please note that this is my personal opinion and not necessarily the opinion of my Broker Dealer.
Ann Doty-Mitchell