Jacko Law Group, PC
Call Today for a Consultation
San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549

FINRA Provides Important Guidance on IRA Rollovers

This month, the Financial Industry Regulatory Authority (“FINRA”) released a regulatory notice reminding member firms of their responsibilities concerning individual retirement account (“IRA”) rollovers and potential conflicts of interest. A conflict exists when brokerage firms have an economic incentive to rollover retirement assets into an IRA sold by the brokers. Consequently, FINRA is reminding brokers that they must evaluate whether it is in the clients best interest to transfer money from the client’s previous 401(k) Plan into an IRA rather, than having a client leave its money in the company plan. Failure to do so could constitute a violation of Rule 2111, relating to FINRA’s suitability rule. The Regulatory Notice also warns member firms to be careful on how they market IRAs.  According to FINRA’s release, “any recommendation to sell, purchase or hold securities must be suitable for the customer and the information that investors receive must be fair, balanced and not misleading.”  [To this end], “the marketing of the IRA rollover services offered by the broker-dealer must be balanced by a discussion of other available options and how they compare to the IRA offered, particularly with regard to fees.”  The release went on to urge FINRA members to educate representatives to understand the tax, fee and investment implications of a rollover so that this important information is analyzed and provided to clients at the point of sale.FINRA also relayed that this area will be an examination priority for FINRA in 2014. With this is in mind, it is recommended that member firms review their policies, provide training and reminders to its representatives regarding suitability considerations for IRA rollovers and review all marketing materials for fair and balanced representations.For further information on this, or other related topics, please contact us at [email protected] or (619) 298-2880.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Email us to request more information or to schedule an appointment.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

San Diego Office
1350 Columbia Street
Suite 300
San Diego, CA 92101

Toll Free: 866-497-2298
Phone: 213-631-2549
Phone: 619-298-2880
Fax: 619-298-2882
Map & Directions

San Francisco Office
Four Embarcadero Center
Suite 1400
San Francisco, CA 94111

Phone: 213-631-2549
Phone: 415-766-3599
Fax: 619-298-2882
Map & Directions

Los Angeles Office
535 N. Brand Boulevard
Suite 270
Glendale, CA 91203

Phone: 213-631-2549
Fax: 619-298-2882
Map & Directions