FINRA Monitoring Best Interest
I wanted to provide you some information that I saw late last week that came from a speech by the out-going FINRA chairman, Richard Ketchum. He was at an event in New York and alluded to the fact that FINRA does not have the authority to enforce the DOL rule; however, FINRA does have the authority to look and see whether firms are dealing fairly with their customers and not misleading them (BTW - they have always done this). My take on these comments and as discussed during the Summer Conference last week is that our advisors need to document every decision made with clients. Make sure you are either taking notes during a client meeting or immediately thereafter so they are fresh in your mind when documented. Salesforce is a great tool for your notes!
The one area that really applies to Ketchum's comments is if a client decides to make an investment strategy change to their account because of the upcoming DOL rule. This applies not only to brokerage accounts that change their investment objectives but also to brokerage accounts moving to the advisory platform. If a client is changing his/her investment objective in a brokerage account - please document the reason for the change on page 2 of the new account form in the Other Relevant Information section.
As a reminder, IPI established as of April 1, 2016 a BD to IA Conversion Analysis Form (see attached) that is required when an account moves assets from a brokerage account (RBC or direct) to an advisory platform. We have received several requests to update the form and hope to complete it and send out the updates in the coming months. Please let Julie Cox or I know if you have any questions on the form. Have a great week! Renee
