It is one point that FINRA wants brokers and their firms to get across. Brokers can stay out of trouble by making sure that investors are well-educated about their choices before they roll over their retirement plan money, as well as additional fees a rollover may cost, say lawyers and compliance professionals.
Some of the largest brokerages automate disclosures about those choices in the online system investors use to set up a rollover. At Bank of America's Merrill Lynch unit, for example, one disclosure advises investors who are leaving one company for another to consider the new company's plan.
Many smaller firms, however, will have to beef up their disclosure practices, said John Gentile, president of Ascendant Compliance Management in Salisbury, Connecticut. All firms will have to train advisers to ensure the conversations they have with clients are consistent with the firm's disclosures and FINRA's expectations, Gentile said.
FINRA can easily check up on brokers who promise clients more fund choices than their company plans, or funds with lower fees, Gentile said. "They will get out the prospectus for each and compare," Gentile said. "Brokers have to be totally up front."