In a recent news story, a large advisory team at a major brokerage firm was fired for what is known as “selling away”. For those of you that aren’t familiar, "selling away" is a securities rule that prohibits employees of brokerage firms from soliciting customers to buy an investment that has not been approved or vetted by their firm.
Seems like good procedure – right? On the surface, this rule helps to ensure you are not sold an investment or product that has not received the proper level of due diligence. But if you look a bit deeper, the rule against “selling away” highlights a key downside to working with a larger brokerage firm: by law, the broker is bound to put his/her firm’s interest first.