NYSE Warns Investors About Following Brokers

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.