Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Brokerage firm’

FINRA Rule 45-30: Expansive new Complaint Report Requirements

Posted by William Byrnes on September 2, 2011


FINRA is digging deep into your customer comment box, and starting July 21, nothing will be off limits to the regulator.

Brokerages often expand beyond securities activities to diversify their income streams and broaden the scope of services they offer their clients. Keeping up with the assorted regulators and what are often cumbersome and confusing combinations of rules has always been a chore for those firms.

Not long ago, firms at least have been able to keep their professions separated, dealing, for instance, with securities and insurance regulators as isolated entities with little overlap in their bailiwicks. But increasingly, regulators like FINRA are erasing this dichotomy, peaking into all of a firm’s activities, even activities that are unrelated to the subject of the regulator’s jurisdiction.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of FINRA rulemaking in Advisor’s Journal, see FINRA Plans New Power Grab as SEC Falter (CC 11-67), Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards (CC 11-08), and SEC Approves FINRA Suitability and Know-Your-Customer Rules (CC 11-17).

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Are Portfolios-to-Go Threatening Full-Service Brokerage and Advisory Firms?

Posted by William Byrnes on April 27, 2011


A growing number of consumers are opting for pre-packaged, low-cost portfolio managers. Portfolio-to-go companies can, at least nominally, provide many of the same services as full-service brokerage firms, since the companies are registered as either investment advisors or broker-dealers. And minimal overhead and services allow them to offer those services without the “high” price tag at brick-and-mortar institutions.

Portfolios-to-go have exploded in popularity recently, bringing in over $3 billion in assets over the past three years.  Read this two-page article by linking to AdvisorOne – a National Underwriters Summit Business open-access original content wealth management news portal.

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Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards

Posted by William Byrnes on February 7, 2011


Brokerages are increasingly looking to claw back signing bonuses from bonus baby brokers who leave for another firm. Signing bonuses at the big broker-dealers saw a big jump in 2008, just as the economy took a dive. Signing bonuses of up to $3 million were being offered to brokers who generated $1 million in commissions and fees in the prior year. And a few bonuses paid at Wall Street firms were reported to have been as high as $10 million. But because many of the bonuses were based on the prior year’s inflated numbers, brokerage firms ended up paying too much for too little performance during an economic slowdown.

Now a bottleneck is developing in arbitration cases dealing with brokers’ signing bonuses, forcing FINRA to reduce the qualifications for persons serving as arbitrators in order to expand its rolls and push the cases through the system. About 1,100 bonus cases have been filed by brokerages as of December 12, compared to just 415 cases in 2008. About 17 percent of 2010 FINRA arbitration cases were bonus-related cases.  Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of broker and securities arbitration in Advisor’s Journal, see FINRA Proposes Eliminating Industry Insiders from Arbitration Panels (CC 10-80) and Mandatory Securities Arbitration Clauses on the Chopping Block (CC 10-48).

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