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Finra guidance could help departing reps hang onto clients

20:35 11 April in In the News by rafferty

April 11, 2019 By Mark Schoeff Jr., Investment News If clients ask, firms must give them contact information for their former brokers Brokers leaving firms could more easily hang on to their clients and avoid being disparaged by their former employers under recent Finra guidance. The Financial Industry Regulatory Authority Inc. issued a regulatory notice last week that told brokerages to "communicate clearly, and without obfuscation, when asked questions by customers about the departing registered representative." In response to a customer query, the firm must clarify that the customer can retain assets at the firm or transfer them elsewhere. The firm also must give the customer the former broker's contact information, if it has been provided. "I'll be asking my clients to put their new contact information in their resignation letter," said securities lawyer Brent Burns,...

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Tampa-Based IBD to Absorb Zombie Firm

16:38 21 March in In the News by rafferty

March 20, 2019 By Diana Britton, WealthManagement Calton & Associates has filed for an asset purchase of accounts that choose to come over from Capital Financial Services, which has some compliance baggage. Capital Financial Services, a small independent broker/dealer in Minot, N.D., will shut down its b/d operations, and its some 100 reps will be absorbed by Tampa, Fla.-based Calton & Associates, a midsize IBD that has done similar asset purchases in the past. President Dwayne Calton confirmed his firm has filed with regulators to pursue an asset purchase of customer accounts at CFS that choose to come over. He said they would like to keep the firm’s North Dakota back-office operations intact, depending on how many reps eventually switch. The deal is pending regulatory approval, but Calton is not acquiring the broker/dealer, which has had...

Financial Advisor IQ a Financial Times Service

Nuisance Fines are Hurting Small B-Ds and Driving Consolidation, Warn Experts

19:09 11 March in In the News by rafferty

March 11, 2019 By Mrinalini Krishna, Financial Advisor IQ Regulatory and compliance asks are hurting smaller broker-dealers — typically those with fewer than 100-150 representatives — and forcing some of them to roll up into larger firms, warns Frank LaRosa, founder and CEO of Moorestown, N.J.-based Elite Consulting Partners. “Smaller broker-dealers are being strangled with the increased burden of Finra oversight. And both Finra and the SEC are coming down with more and more penalties for nuisance issues, which is really squeezing broker-dealers essentially out of the business. And what they're doing is they're rolling up,” LaRosa says. LaRosa says his team worked on several transactions last year and is currently working on a few such deals. While LaRosa is not saying regulators are going after small broker-dealers in particular, he does say the scale...