Broker-Dealer Recruitment Disclosures: Complying with FINRA Rule 2273
Representatives who leave their firms often contact former customers and emphasize the benefits the former customers would experience by transferring their assets to the firm that recruited the registered representative (recruiting firm) and maintaining their relationship with the representative.
In this situation, the former customer's confidence in and prior experience with the representative may be one of the customer's most important considerations in determining whether to transfer assets to the recruiting firm.
However, former customers may not be aware of other important factors to consider in making a decision whether to transfer assets to the recruiting firm, including direct costs that the customer may incur.
To provide former customers with a more complete picture of the potential implications of a decision to transfer assets, FINRA Rule 2273 requires delivery of a FINRA-created Educational Communication (http://www.finra.org/industry/broker-recruitment-notice) by the recruiting firm that highlights key considerations for former customers in transferring assets to the recruiting firm, and the direct and indirect impacts of such a transfer on those assets.
Download the Broker-Dealer Recruitment Disclosure Statement
FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see Interpreting the Rules for more information.
OGC staff contacts:
Phil Shaikun and Jeanette Wingler
1735 K Street, NW
Washington, DC 20006
Related: Customer Account Transfers
- SEC Approves Rule Requiring Delivery of an Educational Communication to Customers of a Transferring Representative
- FAQIn March 2016, the SEC approved the adoption of FINRA Rule 2273 (Educational Communication Related to Recruitment Practices and Account Transfers).August 19, 2016