Just got married a couple months ago. Wife works for Raymond James as an investment advisor and says they’re big on this finra rule stating she has to use her employer’s brokerage and so do I as her husband due to the potential for insider trading I guess? I’m against it because there’s an ‘up to’ $26 fee every time she buys or sells a stock which is outrageous. I told her she’s blowing it out of proportion, but she thinks she’ll lose her job if they find out I’m on a different brokerage.
Yes, she can lose her job for this, along with her ability to work for virtually any other financial institution.
Effectively your wife’s employer is responsible for ensuring she is not conducting any illegal trades and, to do that, they also require that they monitor the accounts of anyone in the same household. Most firms will offer you the option of a few different brokers you can use, presumably who they’ve integrated with for reporting. However it sounds like you’re wife’s firm has used it to also drum up some business for themselves - which is sadly allowed.
Keir said:
Will get this taken care of asap. Thank you, friends!
If she and you feel strongly about it, she can request an exception (but it’s unlikely that it will be granted). She might already be subject to some disciplinary action because she should have disclosed all of your accounts promptly after you married.
Also, as a regulated employee, she (and you as her husband) will be restricted in your ability to buy and/or sell individual stocks. Surely she’s aware of these restrictions and should explain them to you.
Keir said:
Will get this taken care of asap. Thank you, friends!
Just to add to what others said: the regulations stated are accurate, I don’t know the rules for her company but I also work in finance and my company has a list of like 3 or 4 approved brokerages. We need to disclose all of our accounts and they have to be at the approved brokerages or through my own company.
There are other restrictions too based off of what level you are at the company and what information you have access to. It ranges from having minimal access to insider info and not having to get approval for trades, but the brokerage reports every trade to your company. Then up to having access to a lot of inside info and able to influence it, which can lead to no trading allowed at all and only being allowed to invest in specific ETFs or mutual funds, could even be forced into like a blind trust where you have almost no influence over what it’s invested in. Most people would fall in between those where there are some companies you aren’t allowed to trade in (conflict of interest or insider info) and other trades just need pre approval with some potential limitations on buy/sell dates.
Unlike congressmen/women finra employees have strict regulations and those regulations extend to spouses and other household members or anyone your wife has influence over on invested (such as a parents account). She could potentially get in trouble for not telling them about your accounts for months, her company will likely get fined (fines will vary if you happened to buy a company she wouldn’t be allowed to). Also she can absolutely lose her job, if she has any credentials (like CFA, CPA, CAIA, etc) she could lose those, she could be fined, potentially jail if they suspect insider trading. This is taken pretty seriously for non-government folk.
Yes - it’s normal. And yes - she could lose her job.
But have her check if there are other brokerages that can be used. Sometimes - there are other brokers that can be supported. It’s sometimes referred by the old terminology known as a “rule 407 letter”. But it would restrict all your investments at the other broker.
“…The purpose of Rule 3210 is to govern accounts opened or established by advisors and brokers at firms other than the member firm where they are employed or registered. Accounts that financial advisors and brokers have with their employers are easily monitored. It also puts conditions on accounts opened and maintained by anyone associated with members. Associated persons include people who are related to the employee such as spouses, children, and other family members…”
Wife works at Chase. I was told I had to switch to an approved broker. They gave me a list of maybe 12. If I didn’t switch she would lose her job since she’d be noncompliant. I have to pre clear all trades with the exception of a list of ETFs that don’t require pre-clearance.
If her firm’s policy is that you as her spouse have to use their brokerage then yes she can 100% be fired if you don’t. She may be able to ask for an exception but it’s entirely up to her firm whether or not to grant it.
As you surmised firms are responsible for monitoring their employees to make sure there isn’t anything unethical happening ie. Insider trading, front running, etc. It’s up to each firm to establish policy on how to do so. Her firm has decided that it’s easier to monitor if everything is at their firm.
Btw it’s possible employee accounts may get a discount on trading fees.
