Understanding financial advisors upfront compensation

In light of the recent FINRA Regulatory Notice 13-02 that would require advisors to disclose recruiting incentives to their clients, we discuss in our article in Investment News how enhanced advisor compensation packages are structured at various independent broker dealers, and what advisors need to be aware of. While advisors can benefit from incentives such as upfront compensation and accelerated payouts, they also need to carefully evaluate the terms of such incentives before making commitments. Accelerated payouts and upfront bonuses should be considered loans until the advisor has met their end of their agreement. Typically, benefits are tied to terms such as set production levels and lengths of stay that advisors need to be sure they can adhere to, as well as potential tax ramifications.  Consequences put in place to protect the broker dealer can be heavy, yet advisors who understand and are comfortable with the terms of their enhanced compensation can benefit from some great opportunities.


For full story featured in Investment News please click here.




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