FINRA Issues New Investor Alert, Plan for Transition: What You Should Know About the Transfer of Brokerage Account Assets on Death

WASHINGTON—The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Plan for Transition: What You Should Know About the Transfer of Brokerage Account Assets on Death. FINRA's new Alert responds to issues raised by investors calling FINRA's Securities Helpline for Seniors, and informs brokerage account holders, family members and other beneficiaries about the general process firms follow when an account holder passes away.

"While many people plan for the inevitable by creating wills or trusts, some investors might not be aware of the steps they can take to help ensure a smooth transfer of securities held in their non-retirement brokerage accounts. FINRA's new Securities Helpline for Seniors brought the importance of this issue to our attention, and we hope investors who read this alert will be better prepared to take action," said Gerri Walsh, FINRA's Senior Vice President for Investor Education.

Plan for Transition provides tips for making the transfer process as efficient and trouble-free as possible for account holders and also for heirs and beneficiaries. Tips include the following.

• Keep family members informed. Have frank and open discussions with family members about your brokerage account holdings and beneficiaries.
• Hold onto account statements and trade confirmations. Something as basic as putting account information in a safe and logical place can help heirs and beneficiaries quickly locate firm contact information and notify the firm upon death.
• Work with your brokerage firm. Brokerage firms often offer services to account holders and their beneficiaries to discuss assets, last wishes and aspects of the transfer process on death.
• Designate beneficiaries with care. Your brokerage firm may provide "Transfer on Death" or other beneficiary documents in order to designate a beneficiary for your brokerage account. Ask your firm who they have recorded as a beneficiary for each of your accounts, and make any changes necessary to conform to your will or estate plan.

A key issue for investors and their beneficiaries to consider is whether a Transfer on Death Plan (TOD) is right for them. Available in most states, a TOD allows investors to keep control of the brokerage account assets during their lifetime. After they die, ownership is passed to the named beneficiaries.

Plan for Transition also outlines what generally happens when an account holder dies, provides tips for heirs and beneficiaries, and lets investors know the options they have if they feel a problem has occurred.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business - from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.