Series 7 practice questionmediumReferral Fees — Registered vs. Unregistered Persons
A brokerage firm wants to implement a referral program. Which individual may legally receive a referral fee under FINRA rules?
- AAn unregistered administrative assistant at the firm, for referring friends.
- BA registered representative of another FINRA member firm.
- CA non-employee who occasionally refers prospective clients.
- DA registered employee of the firm, for referring a new customer.✓ Correct answer
Explanation
Why D — A registered employee of the firm, for referring a new customer.
Only registered persons of the broker-dealer can receive referral fees for bringing in new business. Unregistered personnel and non-employees cannot be compensated for referrals.
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