02.09.22

FINRA Finds Brokerages Fall Short on Reg BI Compliance

by: Mark Schoeff, Jr.

FINRA outlined shortcomings it found during Regulation Best Interest (Reg BI) compliance reviews in a report on its examination and risk monitoring program released Wednesday. Firms and representatives were “making [investment] recommendations that were not in the best interest of a particular retail customer based on that customer’s investment profile and the potential risks, rewards and costs associated with the recommendation,” the report states. The report faulted firms for “not identifying conflicts or, if identified, not adequately addressing those conflicts.” It cited insufficient disclosure of fees related to investment recommendations and problems with disclosures related to “material limitations in securities offerings.”

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