INFORMATION TO RETAIL CLIENT
Information to Retail Client, Securities Firm Management, Registered Representative Training and Compensation Practices were issued on April 10, 1995 by a committee established by Securities and Exchange Commission Chairman Arthur Levitt, Jr. The panel studied how management practices, including compensation, affect client-broker relationships. Daniel Tully, Chairman of Merrill Lynch & Co., served as the committee's chairman. Other members were: Warren Buffett, Chairman of Berkshire-Hathaway, Inc.; Samuel Hayes, a Professor at the Harvard Business School; Raymond A. Mason, Chairman of Legg Mason, Inc. and former SIA Chairman; and, Thomas O'Hara, President of the National Association of Investors Corp.
- Investors should be educated about their rights, responsibilities and the market forces affecting securities prices.
- Customers should be provided with clear measures of risks and returns for specified time periods.
- Registered Representatives should know client objectives and their risk tolerance.
- Payments by clients in the form of fees, transactions charges and other costs should be clearly stated and should meet client preferences.
For more information on Best Practices, please contact Don Kittell.
