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Author: rafferty

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Finra backs incentive comp disclosure rule

15:05 23 September in In the News by rafferty

September 19, 2013 by Mark Schoeff Jr., Investment News Rule goes to Securities and Exchange Commission for consideration The board of the Financial Industry Regulatory Authority Inc. has approved a proposal that would require brokers to disclose the amount of incentive pay they received to switch firms. Recruiting compensation of $100,000 or more — including signing, upfront or back-end bonuses, loans, accelerated payouts and transition assistance — would have to be disclosed to any customer who followed a broker to a new firm within one year of his or her transition. The broker also would have to disclose future compensation based on performance. The reporting threshold was increased from the $50,000 level in the original Finra proposal released this year. Firms would have to disclose to customers compensation paid to new recruits in the ranges of $100,000 to...

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FINRA Broker Bonus Plan Would Be ‘Nonevent’ for Many Reps: Henschen

16:25 20 September in In the News by rafferty

September 19, 2013 by Melanie Waddell, ThinkAdvisor Measure would require reporting of payments $100,000 or more The Financial Industry Regulatory Authority announced Thursday that its Board of Governors approved a proposal requiring brokers to disclose recruitment compensation paid to them as an incentive to move to a new firm. The regulator raised the threshold of payments that would need to be reported. The rule would apply to recruitment compensation — including signing bonuses, up-front or back-end bonuses, loans, accelerated payouts, and transition assistance — of $100,000 or more, and to future payments (trade-based or asset-based) contingent on performance criteria. The proposal will be submitted to the Securities and Exchange Commission for review and approval. The SEC could then put the proposal out for public comment or approve it. If ultimately approved, brokers would need to disclose their recruitment compensation to any...

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Making Sense of the Nonsensical Broker Comp Rule

18:37 18 September in Articles Written by Jon Henschen by rafferty

by Jon Henschen September 18, 2013 featured on ThinkAdvisor New rule inequitable for independent BDs For advisors changing broker-dealers, financial assistance in the form of forgivable loans is standard procedure for regional broker-dealers and wirehouses, but less common in the independent channel. Wirehouses commonly offer up to 300% of trailing 12 months’ production. In the independent channel, for those firms that even offer forgivable notes, the amounts are typically in the range of 10% to 20% of trailing 12 months’ production. The new disclosure rule will not apply to incentives totaling less than $50,000. While that figure might look reasonable at first glance, applying a static amount as a guideline fails to differentiate between large and small producers. For example, in the independent channel, forgivable note money is intended to cover initial transition expenses and...