Contacting Former Customers After Moving to a New Firm
When a registered rep moves to a new firm, he may want to contact his former customers and urge them to move over to his new firm and maintain their relationship. Should this occur, the representative’s new firm must give the customer an educational communication prepared by FINRA.
The educational communication, which is posted on FINRA’s website, is designed to clearly explain the issues that could come up if the customer moves to the new firm. It encourages customers to ask the following questions:
• Could financial incentives create a conflict of interest for your broker?
• Can you transfer all your holdings to the new firm? What are the implications and costs if you can’t?
• What costs will you pay—both in the short term and ongoing—if you change firms?
• How do the products at the new firm compare with your current firm?
• What level of service will you have?
The educational communication must be provided upon first contact with the customer, and delivered exactly as it appears on FINRA’s website.
If the individualized contact is in writing, a physical copy of the educational communication must be included. If the contact is electronic, the educational communication must be provided as an attached file or by prominently including the link. If the contact is oral, it must include oral notice that the educational communication w