FINRA has issued a Regulatory Notice warning broker-dealers not to mislead retail investors about fees associated with brokerage and IRA accounts.  FINRA indicates that firms cannot advertise “free” brokerage or IRA accounts without additional fee disclosure relating to account maintenance fees and product level fees.  FINRA also makes clear that a footnote about these fees in a piece advertising free accounts would violate FINRA rules.  Firms may include disclosure that other fees apply along with a hyperlink to comprehensive fee disclosure.

OUR TAKE: Do broker-dealers really need a regulatory notice telling them not to advertise free services that were not really free?  Apparently.  This same rule could apply to any investment product advertising.  Perhaps most significant is the warning that a mere footnote won’t otherwise cure misleading statements.