SELCO Financial Adviser Says SEC Changes Could Jeopardize Client-Broker Relationships
EUGENE, Ore. -- SELCO Community Credit Union is the latest to offer its two cents on proposed amendments from the SEC regarding broker and client relationships.
Melisa Lindsay, a financial adviser and program manager for the $784 million SELCO's investment division, said SEC's amendment regarding what happens when registered representatives leave one brokerage firm for another, taking with them their book of business--addressed in Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information--may impact future investor relationships.
"I believe that this type of change in regulation would be detrimental to our business at the credit union, especially in the cases of successful representatives that build large client [and] member books of business at the credit union and then would leave to work for another financial institution [bank or credit union program]," Lindsay wrote in a May 8 comment letter to SEC. "It would potentially put the entire member-client relationship at the credit union in jeopardy by allowing them to be solicited by the new employer [potentially a bank or another credit union]."
NACUSO and Credit Union Financial Network, a Phoenix-based investment services CUSO, have both written comment letters to SEC with similar concerns on the proposed changes.
Lindsay agreed with NACUSO's position that it is fine to permit limited disclosure for the purpose of implementing the agreed protocols between broker-dealers but the permissive sharing of information between consenting parties does not supersede the right of other parties to prevent the sharing of information that the parties agree is trade secrets or is otherwise deemed such by applicable law.
"We agree with this stand point, however the interests of the members of the credit union should be protected and to do that, it seems that supplying contact information for a prior representative should only be done upon explicit request from the investor," Lindsay wrote.