The appeal of generous signing bonuses has financial advisors eager to sign the dotted line, but it isn't always easy breaking away from that golden tether.
Dow Jones Newswires recently reported on cases in which FINRA panels have ruled that advisors who left their firms before the end of their signing contracts have to pay up.
The advisors came from high-profile firms, including Morgan Stanley Smith Barney and Wachovia Securities, and found themselves ordered to pay upwards of $300, 000 when they prematurely left their companies.
FINRA arbitrators decide in favor of firms in most cases because of the clear terms in employment contracts, which grant signing bonuses in the form of loans over seven to 10 years which are forgiven each year. When brokers leave, they have to repay the remainder.