The brokerage industry is warning that lack of a cost-benefit analysis could doom Finra’s plan to require disclosure of broker-recruitment bonuses.

In comment letters to the SEC, industry interests say Finra needs to do more to justify the controversial disclosure plan.

“The lack of analysis is inconsistent with Finra’s commitment to economic impact assessment and evidence-based rulemaking,” wrote Cetera Financial Group general counsel Nina McKenna.

“Implementation of the [recruitment] proposal would be greatly enhanced by further [cost] analysis,” wrote Securities Industry and Financial Markets Association (Sifma) general counsel Ira Hammerman.

In its filing, Finra claimed that the proposal would not impose undue costs on firms, but “Sifma is unaware of the basis and analysis supporting this conclusion,” Hammerman said.

“We encourage Finra to utilize [its promised] economic impact assessment framework and to … provide supporting evidence where practicable,” wrote Financial Services Institute general counsel David Bellaire. “Furthermore, Finra should engage in a retrospective review of the finalized rule” after five years.

Commonwealth Financial Network complained that Finra cited no enforcement actions “or other empirical evidence that transition assistance [to brokers] creates a conflict of interest. … We urge the commission to reject the proposed rule in its current form and direct Finra to redraft the proposal.”

The comments could provide the basis for a future legal challenge. Business groups have effectively challenged new industry rules based on a lack of a cost-benefit analysis, causing a delay in much of the Dodd-Frank implementation, for example.

The Finra proposal would require disclosure to customers of recruitment incentives totaling $100,000 or more when their broker changes firms and makes contact with them.

Separately, firms would have to inform Finra of any broker recruit who is expected to increase earnings by the greater of 25 percent or $100,000 during the first year at the new firm.