Thursday, 12 October 2017 09:06

The Fiduciary Rule Has Curtailed Broker Recruiting

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(New York)

While the fiduciary rule has largely been stopped for now, it is still having an impact in a number of areas. One part of the industry that has seen significant direct impacts is in broker recruiting. Prior to the imposition of the rule so-called “prisoner exchange” was running very high, with huge seven-figure payouts from senior brokers changing firms. However, the part of the rule demanding “reasonable compensation” means that many are worried the big signing bonuses will run afoul of the regulation, which has led to drastic cutbacks in the practice.


FINSUM: Everything about this rule raises margins and profits for firms, all at the expense of advisors and clients. Hopefully the SEC comes out with something better.

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