Subject: IA-BD-Conduct-Standards
From: Elizabeth Copley

July 10, 2017

As a FINRA Arbitrator for over 20 years, I am fairly familiar with a number of broker -dealer practices.  One relevant one has to do with Trust Accounts .  It is very common for broker-dealers to have very specific and strict guidelines on how individual brokers are to handle these accounts, which would be considered generally very conservatively ( e.g. no options etc.).  Brokers are very familiar with these guidelines, which have been in place a number of years.  Thus, a simple, cost effective solution to Fiduciary Rule conundrum is to simply  code all IRA's and 401 K's as Trust Accounts, which is logically consistent anyway given their long term purpose and the desire to protect corpus/principal.  This eliminates need for extensive new training of brokers with attendant "mistakes" on part of brokers and subsequent lawsuits.  Although Trust Accounts are probably not as lucrative as regular brokerage accounts, this designation would seem to meet goal of preservation without significant new training or litigation expenses.  It would certainly seem to be worth consideration.

Elizabeth Copley, Esq.
FINRA Arbitrator