FINRA Moves Forward On Controversial Fund/Advisor Revenue-Sharing Disclosure Hot

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At the moment, broker-dealers only have to reveal which fund companies pay them in the small print.


But as part of its ongoing consolidation of the rules it inherited from the NASD days, FINRA wants them to set up a website or toll-free number that shows the world exactly what cash compensation relationships each firm has with each fund company.


"Preferred" fund vendors would also need to be flagged, making those relationships transparent to all clients, prospects, and the public.


In theory, this could pave the way to setting up "fiduciary watchdogs" who monitor fund sales activities for conflicts of interest.


FINRA tried to institute this change two years ago, but at the time brokers argued that it would be too confusing to their clients.



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