Our firm’s default equity commission schedule is designed to cover the vast majority of client transactions. However, we recognize that some recommendations require additional research, due diligence, or analysis beyond what is typical. For those situations, the firm offers an alternate equity commission schedule.
Below is a quick refresher on when the alternate schedule may be used — and how to apply it correctly.
When the Alternate Schedule Is Appropriate
The alternate equity commission schedule may be used only when:
- The trade is solicited
- The recommendation involved additional research or due diligence
- The higher commission reasonably reflects the value of services provided
Best practice: Maintain notes or supporting documentation in the client file describing the additional work performed. This helps demonstrate the justification for using the alternate schedule if the transaction is ever reviewed.
How to Apply the Alternate Schedule
- Registered Representatives must manually input a commission override at the time of trade entry
- Overrides must be accurate and within the firm’s stated commission limits
- Always confirm the override aligns with the applicable principal tier under the alternate schedule
Important Restrictions to Remember
Unsolicited orders:
The alternate schedule may never be used on unsolicited client trades.
Exceeding firm limits:
If an entered commission exceeds the firm’s allowable mark-up:
- The order will be held by ESI’s trading system
- A $17.00 commission will be applied to the trade
(This charge covers the Registered Representative’s trading cost and does not represent the alternate schedule.)
Bottom Line
The alternate equity commission schedule is a valuable tool when additional effort supports a recommendation — but it must be used carefully, accurately, and with proper documentation. Taking a few extra moments during trade entry can help avoid delays, holds, or unintended charges.
If you have questions about applying commission overrides or whether a trade qualifies for the alternate schedule, please contact the ESI Trade Desk at 1-800-344-7437, option 2, option 3, option 1.
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