Additionally, customers would have to be told of potential costs in transferring accounts and issues with product portability.

Comments on the proposal were due April 18.

Several wirehouses expressed their support for the Finra plan, while independent firms generally opposed it.

One issue a number of commenters are concerned about is the lack of any disclosure requirement on the part of a former firm.

In its SEC filing, Finra decided not to require former firms to disclose retention bonuses or incentives to retain clients of a departed broker.

Wells Fargo Advisors “respectfully disagrees,” wrote Robert McCarthy, the firm’s director of regulatory policy. “The presence of retention incentives could motivate a representative at the former firm to suggest that transfer costs will be incurred [or] suggest issues of portability” when those issues may not apply.

“The old firm should be required to disclose any enhanced compensation,” wrote the Public Investors Arbitration Bar Association (Piaba), which represents investor plaintiffs’ attorneys.

“Finra’s proposed rule focuses too narrowly on enhanced compensation for registered representatives switching firms,” Piaba said.

The Financial Services Roundtable said Finra should consider making former firms disclose information about transfer fees and portability, rather than the recruiting firm.

Commenters also urged the SEC to drop a requirement for oral disclosure, which is in addition to a written document, and they want harmonization of the separate information that would be disclosed to customers and Finra.

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