FINRA Plan to Rid BDs of Advisor Liability Would Hit Firms’ Fee Revenue
January 12, 2018 By Melanie Waddell, ThinkAdvisor The plan would resolve BD complaints about paying large fines for RIA compliance failures, recruiter Jon Henschen says The Financial Industry Regulatory Authority plans to issue a proposal that would free broker-dealers from keeping track and maintaining liability for registered investment advisor business — a huge win for hybrid BDs — but they’d also be forced to take a hit to fee revenues. FINRA’s Board approved at its December meeting the publication of a regulatory notice seeking comment on changes to its rule on outside business activities that seeks to streamline BDs' obligations by “generally excluding from FINRA’s rule on a registered person’s personal investments and work performed on behalf of a firm’s affiliate,” and eliminate supervisory obligations for non-broker-dealer outside activities, including investment advisory activities at an unaffiliated third-party advisor. No...