Solicitor Agreement

S

Stephen

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I have a friend of mine that is securities licensed(I am not). He has asked me if I would be interested in signing a solicitor agreement.

The purpose of this agreement would be for clients that i run into that have brokerage accounts that I would pass along to him to place under management. I would receive a lifetime % of his commission as long as he keeps the money under management.

My question is of course what % split is fair, and if this kind of agreement is recommended.
 
Sounds like a good way to have a not so friendly visit from your state department of securities once they find out. Your friend will be conferring with FINRA at the same time.
 
My limited understanding is that a solicitor agreement is a legal way to share commissions with a person without a securities license, as long as the unlicensed person is not discussing securities.
 
I'd call your state's department of securities. In general this is forbidden. There is a way to do it with CPAs and attorneys, not familiar with insurance agents. Also, make sure there are no mistakes that would land you in hot water.
 
In general it is legal... for now...

It has to be a written agreement.

It is state specific and some states make you file the agreement with the state securities commission.

This is what CPAs, Lawyers, and banks do; and yes, insurance agents can too.

I hear FINRA is going to do away with this though.
 
If he writes fixed business, just have him code you in every once in a while on those products.
 
scagnt83 said:
In general it is legal... for now...

It has to be a written agreement.

It is state specific and some states make you file the agreement with the state securities commission.

This is what CPAs, Lawyers, and banks do; and yes, insurance agents can too.

I hear FINRA is going to do away with this though.
Click to expand...

Are you familiar with what kind of splits are standard?
 
I have P and C guys that pass me along referrals for Security related business...However, I do not share commissions, as I thought you would have to have atleast a Series 6 and 63 license....But what I do is pay him a referral fee. This practice too is being watched a little more closely. Your best bet would be to get licensed, and go on the case for atleast 30-40%...
 
Centralsolution said:
Are you familiar with what kind of splits are standard?
Click to expand...

It really just depends on the situation.

How much work are you doing on the front end to get them to the table with him?

Are these going to be "slam dunk" cases for him? Or will he have to work for it?
(this is more about the relationship between you and the prospects you bring him, and how well you can transfer that relationship into the securities deal)


Is this just a true "hand off" to him, or will you formally introduce the two and sit in on the first meeting?


Your split should be dependent on the amount of work your taking on and the value of it.


The bare minimum would be passing along a name and contact number, that would justify around 20% imo.

Ideally you should personally introduce the two after talking him up, and then sit in on the first meeting (even if you dont say anything its more reassuring for the client and will build more trust)
 
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