April 8, 2014
As an independent financial advisor, I support regulatory efforts aimed to protect investors. I agree with FINRA`s goal to disclose material conflicts of interest to investors; however I have concerns with FINRA`s proposed rule on recruitment compensation disclosure. I am concerned that FINRA`s proposed rule will create problems that will outweigh its benefits and will give investors the mistaken assumption that a material conflict of interest exists in every situation where an advisor accepts recruitment compensation.
There may be valid reasons to disclose incentive compensation when investment representatives/advisors change firms, but the disclosure should be balanced and fair to the rep/advisor, the recruiting firm and clients. I would simply suggest that FINRA move slowly and cautiously on this proposal and perhaps pursue other means of addressing conflicts of interest in recruitment compensation arrangements.
Thank you for considering my comments.
Sincerely,
Bradford Tharp