Mindy Diamond Quoted

Wirehouse support of FINRA’s proposed rule requiring brokers to disclose recruiting incentives caught many by surprise. Many industry observers characterized it as an effort to curb the ever-growing piles of money the firms must pay to recruit top talent; others suggested brokers would be less likely to jump from the mother firm if they knew they had to disclose incentives. …

Mindy Diamond, president of the recruiting firm of Diamond Consultants, says that firms really had no choice. “I don’t believe that the move has anything to do with a clandestine effort to drive transition deals lower. They didn’t have a choice from a PR standpoint.”

If the firms had refused to support FINRA’s stance, it would’ve sent a message to the public that they didn’t support putting the client’s best interests first. Additionally, wirehouses may have had to grapple again with a public discussion about their perceived lack of transparency.

Diamond also dismissed fears that the wirehouses planned to use the rule as a way to come together to lower the current outsized packages. “These firms know that without sizable deals, they will do no recruiting,” she says. Read more…