A Tale of Two Rules


Independent financial advisors have their hands full. On top of market, geo-political, economic and industry headwinds and anxious clients, the community is contending with two potentially paradigm-shifting scenarios: one regulatory, the other legislative. Both have been on the industry’s radar. Both have prompted push back. The first, FINRA Rule 4111 is a done deal, with a new reporting element that’s taking effect June 1, 2023. The other, revisiting the PRO Act’s independent contractor rules, has some runway before adoption – as well as the possibility of dialing back the disruption. Let’s see where we are right now and what they mean to the independent advisor space. The 411 on FINRA Rule 4111 On January 1, 2022, FINRA Rule 4111 became effective. The Rule’s intent is to protect investors by identifying firms with a history of misconduct (“Restricted Firms”) and subjecting those firms to certain obligations. Such obligations include depositing cash [...]