Brokerage Structure, Supervision, and Trust Accounts
Hawaii uses a distinctive three-name broker structure and places clear supervisory and trust-handling duties on the top broker. This chapter explains the Principal Broker, Broker-in-Charge, and Associate Broker roles and the rules for client money.
Principal Broker, Broker-in-Charge, and Associate Broker
Each Hawaii brokerage designates a Principal Broker (PB) who carries top responsibility for the firm's operations, trust funds, and supervision of affiliated licensees. A Broker-in-Charge (BIC) supervises a specific branch office. An Associate Broker holds a broker license but works under the PB or a BIC rather than running the firm. Understanding which role bears which responsibility is central to the broker exam.
Supervision of Affiliated Licensees
The Principal Broker and each Broker-in-Charge are responsible for supervising the salespersons and associate brokers at their office, including advertising, agency disclosures, and handling of client information. When a licensee violates a duty—for example by failing to disclose a material fact—the supervising broker must ensure the problem is corrected and may share responsibility for the misconduct.
Client Trust Accounts
Client money such as earnest money must be held in a client trust (escrow) account, separate from the broker's operating and personal funds. Commingling or converting trust money is prohibited and is one of the most serious license-law violations. The broker must maintain accurate records and be able to account for every dollar of trust money at any time.