Updated Tuesday, September 1, 2015 as of 4:27 PM ET

Outsized Recruitment Deals Are Liable to Fade Away

The question isn’t whether or not FINRA and the SEC will require financial advisors to disclose the details of their compensation packages when they switch firms. The big question isn’t, “What will my clients think if they know how much money I’m earning to move my book of business?”  Similarly, spending your time wondering what the maximum compensation you can receive as a recruitment bonus -without having to disclose it- is frankly, a waste of time.

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Comments (1)
I have asserted, repeatedly, that the wirehouses have not only been supportive of this FINRA rule, but that they are, in fact, the instigators of it. The big wirehouses have needed cover to act in concert and FINRA has given it to them. Some of my other esteemed colleagues have offered compelling arguments that seek to deny that huge transition bonuses are going to go away. I respectfully submit, and clearly so does the author here, that they are wrong. The money being paid to lure advisors away from competing firms has gone from eye-opening, to stunning, to ludicrous. There is no way the firms can continue to justify paying out transition packages that too-often do not pencil out in favor of the firm. I don't agree that an advisor should essentially sell their book to another firm if transition money is the sole motivation for such a move. But Mr. Wasserman is right. If someone is going to do it anyway, they had better move quickly.
Posted by Ron E | Wednesday, February 26 2014 at 1:00PM ET
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