Customer Accounts - Maintaining Customer Accounts
A client's financial situation may change, so it is important for representatives to verify periodically that the customer's information is still accurate. Clients may not be forthcoming with such changes, but clues such as changes in purchases and sales may indicate otherwise.
As an investor ages, his or her risk tolerance, investment time horizon and goals change. All clients will modify their investment objectives to match changes during their lifetime.
A change in address may affect the ability of a registered rep or broker-dealer firm to serve a client. If a broker-dealer or rep is not registered in the state in which a client now lives, no business may be transacted until the registration is updated.
When a customer wishes to transfer an account from one broker-dealer to another, the customer must sign a transfer request with the new member firm, which is mailed to the carrying firm.
Both member firms must coordinate their activities to expedite the transfer:
- the client's new firm must immediately submit the transfer request to the carrying firm, and
- the carrying firm must either validate the instructions or take exception within three (3) business days.
- Any exceptions must be resolved in an expeditious manner by the two firms.
- Causes for exceptions to the transfer include incomplete or improperly signed transfer instructions or having no record of the account. Otherwise, the carrying firm is obligated to make the transfer as quickly as possible.
Broker-dealers are required to provide customers with a statement at least quarterly, although if any activity has occurred in the account, the usual practice is to provide a statement for the month in which the activity has occurred. The account statement contains the following information:
- Cash balances
- All security positions
- Activity in the account since the last statement