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FINRA Addresses Compliance Issues in Annual Letter

Most compliance problems can be alleviated if brokerage firms act in the best interests of their clients, says FINRA. Wait – aren’t they already supposed to be acting in the best interest of their clients? Not in the way you may think.

What is FINRA? Click here to learn more.

Sounds obvious, right?  In its 10th annual letter to members, issued last month, FINRA laid out five general compliance issues that firms should address in order to help face compliance issues.

“A central failing, FINRA observed, is firms not putting customers’ interests first,” the letter states. “Irrespective of whether a firm must meet a suitability or fiduciary standard, FINRA believes that firms best serve their customers — and reduce regulatory risk — by putting customers’ interests first. This requires the firm to align its interests with those of the customer.”

Again, seems like things that brokers should not have to be told.

Will it make any difference? That’s the hope. Additionally, FINRA’s 17-page letter laid out a number of areas on which the regulatory agency plans to focus in the upcoming year, including alternative mutual funds.

Stay tuned.


Posted on 2/16/2015