Effective January 1, 2021, The Leaders Group will be rolling out a new “Client Account Update Form” to coincide with our 36-month client account verification notice that is sent via email to your clients or by physical letter. With that said, here is a recap of why we are required to send out these notices:
The Know Your Client (KYC) rule is an ethical requirement for those in the securities industry who are dealing with customers during the opening and maintaining of accounts. There are two rules which were implemented in July 2012 that cover this topic together: Financial Industry Regulatory Authority (FINRA) Rule 2090 (Know Your Customer) and FINRA Rule 2111 (Suitability). These rules are in place to protect both the broker-dealer and the customer and so that brokers and firms deal fairly with clients.
The Know Your Customer Rule 2090 essentially states that every broker-dealer should use reasonable effort when opening and maintaining client accounts. It is a requirement to know and keep records on the essential facts of each customer, as well as identify each person who has authority to act on the customer’s behalf.
The KYC rule is important at the beginning of a customer-broker relationship to establish the essential facts of each customer before any recommendations are made. The essential facts are those required to service the customer’s account effectively and to be aware of any special handling instructions for the account. Also, the broker-dealer needs to be familiar with each person who has authority to act on behalf of the customer and needs to comply with all the laws, regulations, and rules of the securities industry.
Changes to our Trade Blotter Procedures: A Trade Blotter should be created whenever you send an application, a check, transfer form, fund company/carrier request, or any other type of documentation related to your client’s accounts. The Trade Blotter helps us and anyone in your office to keep track of how items were submitted. Please click here to learn more.
As a reminder, effective August 12, 2020, please refer to leadersgroupuniversity.com for all FAQs, walkthroughs, and educational material. This site serves as a resource for education support relating to sales, practice management and business operations at The Leaders Group.
The official 2020 year-end compensation cut-off for deposits received will be on Tuesday, December 29, 2020 by market close (4:00 PM EST). The cycle will post to your bank account on Thursday, December 31, 2020 to close out the year.
Please note during the week prior for Christmas our cut-off for deposits received will be on Tuesday, December 22, 2020 by market close (4:00 PM EST). The cycle will post to your account on Thursday, December 24, 2020.
As always, please do not hesitate to contact the Compensation Team via email at firstname.lastname@example.org or by phone (303) 797-9080 Ext 1610 if you have any questions or concerns.
David Francis, Principal Operations Officer