FINRA Podcast: Communications with the Public: Retail and IRA Fee Disclosure

FINRA released a podcast discussing guidance on fee disclosure and communications with the public when dealing with retail brokerage accounts and individual retirement accounts ("IRA").The podcast stated that many firms offering retail brokerage accounts and IRAs advertise no fees to the consumer on those types of accounts. However, FINRA noted that, while some fees will not apply, consumers will be charged certain fees for those accounts which can involve the opening or closing of the accounts, as well as associated product fees, including commission and management fees. FINRA expressed concern that certain communications about the related fees for accounts may not be fair and balanced, and could mislead with overly broad language that omits certain material information. FINRA stated that, in some instances, claiming that an account has no fees would go against FINRA Rule 2210 ("Communications with the Public").

FINRA explained that claims for fees which do not apply must be accompanied by clear disclosures of the types of fees that may be charged. FINRA information may only be placed in a legend or footnote if that placement would not inhibit an investor's understanding of the communication. FINRA also provided additional guidance on language that firms should include on their advertisements to provide clear communication of possible fees associated with accounts.

See: FINRA Podcast.