On May 10, FINRA issued investor alert on when a broker leaves.
- Follows FINRA Apr. 2019 notice communication for departing reps.
- Investor alert on how clients will be communicated with, when a broker leaves.
Investor Guidance
- Complete answers about departing broker allows informed decision on account.
- Broker departure should not disrupt the service the firm provides its customers.
- Inform customer of choice to keep assets at current firm, and be serviced by a
newly-assigned broker, or a different broker, or transfer assets to another firm. - Provide contact information for departing broker if latter consented to doing so.
- Information firm provides on a departing broker must be balanced, not mislead.
- FINRA rule require when a broker moves to new firm, firm where broker moves
must deliver former customers educational communication about asset transfer.
Issues Clients Should Consider
- The document highlights conflict-of-interest and cost considerations of transfer.
- Consider whether broker advice is aligned with their investment strategy, goals.
- Consider transferability of assets, costs associated with managing those assets.
- As well as taxes, old firm may charge account-closing fees, your broker should
explain pricing structure of new firm and how the ongoing cost would compare. - New firm may not offer investments bought in past or considering in the future.
- Consider if have access to services, support, online resources that meet needs.
