With the number of brokers switching firms on the rise, the New York Stock Exchange has issued an advisory warning investors of possible problems that could arise with following a broker. In 2005, the Wall Street Journal reports, the number of “registered personnel” that changed jobs rose 18%. According to the Journal, while investors may not want to lose an established relationship with a broker who moves on, they should be wary of potential conflicts of interests. For example, brokers may receive generous bonuses from their new firms – some as much as 150% of commissions and fees in their first year – may prove to be enough temptation for a broker to try to sell products to longtime clients that may not be appropriate.
