FINRA has filed a proposal with the SEC requiring advisors to disclose recruitment bonuses to their clients when switching firms, according to documents posted on FINRA’s website.

The proposed rule would require advisors changing firms to disclose the financial incentives they were given, if those incentives are $100,000 or more of either upfront recruitment bonuses or deferred bonuses, according to the documents. These bonuses include upfront or deferred cash, forgivable loans, loan-bonus arrangements, transition assistance, or equity awards. The recruited advisor would indicate to his or her clients how much the bonus was within a given set of ranges: $100,000 to $500,000; $500,001 to $1 million; $1 million to $2 million; $2 million to $5 million; and above $5 million.

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