May 9, 2016
Lost in the commotion surrounding the Department of Labor’s new fiduciary rule was the Securities and Exchange Commission’s approval of FINRA’s recruitment bonus disclosure rule, which requires action by broker dealers when recruiting new representatives.

The new rule may prove especially timely as seven- and eight-year retention agreements and recruiting contracts entered into during the financial crisis of 2008-2009 expire and recruiting activity heats up. While not as onerous as the originally proposed rule, the new FINRA guidelines still require action by broker dealers following the recruitment of new representatives. For example, recruiting firms will have to advise their brokers on how to draft disclosures and answer consumer questions.

To read the full alert, click here.