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Expert Analysis

How FINRA Rule 2111 Affects Fee-Based Accounts

Law360, New York (September 10, 2012, 12:01 PM EDT) -- The Financial Industry Regulatory Authority's new suitability rule may well have an unintended positive effect on fee-based accounts for member firms. For some time, member firms have grappled with utilization issues relating to fee-based, or so-called "wrap-fee," accounts. In certain circumstances, the fees charged to fee-based customers may appear to outweigh the actual trading or "activity" in their accounts, and the securities regulators have fined several firms for failing to have systems in place to adequately monitor utilization to identify potentially "underutilized" accounts....

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