As assistant vice president and chief compliance officer for Allstate Distributors in Northbrook, Ill., MARIBEL GERSTNER is an expert on Financial Industry Regulatory Authority (FINRA) rules covering meetings and gifts. Still, give her a specific scenario and ask her if the rules allow it and she is as likely to say, “I would feel good about that” or “probably not” as she is to say “yes” or “no.” As Gerstner notes, “You can learn these rules in five minutes, but the application is difficult. The devil is in the details.” We attended Gerstner's workshop at's 2007 Annual Conference and followed up with questions on guidelines for training and education meetings.
Financial & Insurance Meetings: To whom do FINRA rules apply?
Gerstner: Banks and broker/dealers that sell securities products and are registered with FINRA. The rules typically come into play when your company is a product provider and you want to get registered reps who work for other companies to sell your products.
FIM: What's the basic intent of the rules?
Gerstner: They are guidelines for companies to avoid improperly influencing someone to sell products that might not be in the best interest of a customer.
FIM: How can a company structure a FINRA-compliant meeting?
Gerstner: There are different, interrelated rules that need to be considered. Which rules apply depends on the nature of the trip or meeting and the relationship of the firm hosting the event to the [potential attendee]. Also, FINRA rules aren't the only ones in force. There are IRS and state insurance regulations that apply to planning meetings for financial services reps. And beyond that, there are your company's rules and the potential attendees' companies' rules. But the bottom line for all of these is, ‘What is the influence on the rep?’
FIM: How do you know if you get it right?
Gerstner: When they come in to audit you! FINRA gives examples of how to follow the rules, but then it's up to us to interpret those rules.
FIM: If I work for a financial services company, can I invite registered reps of other firms to attend my training and education (T&E) meeting?
Gerstner: Yes, you are allowed to pay for their expenses to attend a T&E meeting.
FIM: Can I hold that meeting at a resort?
Gerstner: FINRA rules require a training and education meeting to be held in a location “appropriate” to the purpose of the meeting. That has been interpreted to mean where your company is located or a nearby facility, or in an office or location near where the reps are located. We're lucky at Allstate, because Chicago is an attractive destination for meetings. That said, there could be times I would get a better rate at a resort than I would in downtown Chicago, so the resort could be “appropriate” if it's proximate to where the reps attending are located. If multiple regional meetings are being held, other appropriate locations can be considered; for example, Los Angeles or San Francisco for west coast reps, Atlanta or Orlando for southeast reps, and New York or D.C. for northeast reps. You can still pick a nice location. But you typically can't send the Georgia reps to California.
FIM: Can I do a three-day meeting with training in the morning, lunch, followed by golf or spa in the afternoon, and then dinner each day?
Gerstner: Probably not. FINRA interprets the T&E exception to the noncash-compensation rule as an event that is first and foremost intended for education. Training should occupy substantially all of the workday, which means three hours for a half-day meeting and six hours for a full-day meeting. So, in this example, it would be reasonable for the meeting to last 1.5 days, not three days. Of course there is a gray area here, too, which is: What makes sense on travel days? For example, if travel takes a substantial part of the day, I can pay for the hotel room on arrival night and the second night if they have a full day of education.
FIM: Can spouses come to a T&E meeting?
Gerstner: No. The host company cannot pay for any expenses of a guest of a registered rep of another firm. If the rep brings a guest, the guest should not be allowed to participate in any part of the event being paid for by the host company.
FIM: How do I decide whom to invite to my T&E meeting?
Gerstner: It can't be based on achieving a sales target, that much is clear. You could ask the reps' firms to tell you which reps they believe could benefit the most from a T&E meeting with your particular content.
FIM: Should I inform the reps' firms that they are invited?
Gerstner: Yes. You must receive prior approval because there could be a disciplinary issue with a rep that you are not aware of, or the firm may limit the number of T&E events their reps can attend and a rep might be approaching that limit. Firms may also have any number of other specific policies that must be followed by the company hosting the T&E event. For example, their reps may not be allowed to travel more than 200 miles, or they can't attend a meeting for more than two days, or they can't attend more than two meetings per year. As a sponsor of a meeting, you have to follow the rep's firm's rules. This gets especially difficult when you have many reps from many different firms attending the same event. It's very complex.
FIM: Must I keep track of the type and amount of expenses associated with the meeting?
Gerstner: Yes. In addition, the firms that are sending their reps to your meeting will probably ask you for a summary because they have to track these expenses as well.
Want to learn more about rules and regs for insurance and financial services meetings? Go to Our new one-stop Web resource on Regulations and Compliance.
The APEX meeting and Event Toolbox 3.0 is now available from the Convention Industry Council. The free upgrade for registered users can run with various versions of Microsoft operating systems. To learn more, go to conventionindustry.org.