Retirement Advisor | January 2016 | LifeHealthPro.com 14
the news 01.16
Coming soon to a computer near
you: More broker transparency
red flag remiNder
giving consumers the ability to check out securities brokers before doing business has been a long-time priority of the financial industry regulatory authority
(fiNra) and its predecessor organization, the
National association of securities dealers (Nasd).
That goal received a boost recently when the
securities and exchange Commission (seC)
approved fiNra’s revised brokerCheck link rule.
effective June 2016, the rule would require
broker-dealers to add a so-called “readily apparent
reference and hyperlink” to the brokerCheck
service on any website viewed by retail investors.
The rule also would apply to any web page that
displays a profile of a securities-registered profes-
sional who works with the public.
although the rule’s development path was
torturous and not all agree with the final outcome,
it will no doubt encourage the public to make
greater use of the brokerCheck service. from an
advisor’s perspective, professional backgrounds
will now receive even greater scrutiny, potentially
creating sales “friction” for those with black marks
on their records.
IMPACT OF THE NEW RULE? The National
ethics association says advisors with clean records
will see more prospects checking them out and
presumably building trust faster than before. such
advisors should promote the link to their current
and prospective customers, as it serves, in effect,
as a powerful third-party reference.
however, advisors with black marks on their
Crds will now confront heightened skepticism in
the sales process. Those advisors should consider
one or more of the
1)be prepared to disclose the context of their infractions and steps taken to prevent problems in the future.
2)for brokers who aren’t investment advisors, step up efforts to secure satisfied client testimonials and share
them with prospective customers.
3)augment website content that details best practices, professional credentials and career accomplishments.
4)Publish an ethics code on their websites (an existing requirement for investment advisors).
5)highlight affiliations with third-party organizations uch as the National ethics association and the better
6)step up financial-education programs, such as retire- ment planning seminars, that demonstrate good
will and help the public begin to address important
financial issues free of charge.
7)increase volunteering and charitable giving in order to become a trusted resource in their communities.
8)advisors with clean records should maintain them by fully complying with all applicable laws and regulations,
maintaining new-business and existing-customer
service standards, and promptly addressing customer
problems before they become errors-and-omissions
for further information, please contact your broker-dealer
compliance department or fiNra.
BY NATIONAL ETHICS ASSOCIATION