Contracting Institutional Financial Advisors

Financial Advisor Services, Compensation, and Role in the Municipal Advisor Rule

Topics: Administration and Finance, Government Relations, External Affairs

This is a preview of restricted content.

  • If you are an EAB member, please log in.
  • If you are logged in and still see this message, the content is outside your membership portfolio, and we invite you to learn more by contacting us.
  • If you are not an EAB member and wish to learn more, please contact us.

Summary

This project outlines how institutions hire financial advisors or otherwise adapt procedures in light of the U.S. Securities and Exchange Commission (SEC)’s final rules on registration of municipal advisors. Specifically, this report will examine how profiled institutions employ financial advisors, determine the scope of financial advising services, and evaluate the value of new financial advising services.

  • Key observations from our research:


    1. Post municipal advisor disclosure statements on institution websites to ensure the continued flow of information from banks.

    2. Common financial advising services include internal bank management, bond sales, financial forecasting, and recommendations on new or existing financial policies.

    3. Administer RFPs to select financial advisors according to services provided, price, trustworthiness, and past higher education experience.

    4. Develop fixed price contracts or retainers to compensate financial advisors for ongoing services and pay one-time fees for bond sales or ad-hoc services.