Mindy Diamond Quoted
By Mark Schoeff Jr.
The Securities and Exchange Commission has approved a Finra rule designed to encourage investors to ask their brokers about incentives they received to change firms.
The compensation rule requires transferring brokers to send an “educational communication” to clients they are trying to convince to make the move with them. That document, written by the Financial Industry Regulatory Authority Inc., will outline things the client should consider, such as whether financial incentives create a conflict of interest for the broker, whether some of their assets can’t follow them and the potential costs involved.
The revised rule is a less-stringent requirement for brokers.
“It’s broker disclosure light,” said Mindy Diamond, president and chief executive of Diamond Consultants, a broker recruiting firm.
The SEC’s OK might accelerate the decision timeline for some brokers who are on the fence about changing firms, Ms. Diamond said. But she doesn’t expect it to cause too much consternation.
“For most quality advisers who have a deep relationship with clients, it will be a non-event,” she said.
