The Financial Services Institute (FSI) has applauded the Financial Industry Regulatory Authority’s (FINRA) plan to enhance its engagement programs, which identifies opportunities to engage with stakeholders and further its mission of investor protection and market integrity.
“We applaud FINRA for undertaking a review of its operations and programs and for including industry participants and stakeholders in the process,” FSI President and CEO Dale Brown. “As one of the only trade associations whose membership includes individual financial advisor members FSI can play a key role in facilitating outreach between FINRA and financial advisors, who are directly impacted by FINRA rules and regulations and whose perspective comes from direct interactions with investors. Over the years, FSI has made it a priority to engage constructively with regulators to create efficient and effective regulations.”
FSI represents independent financial advisors and independent financial services firms.
In March, FINRA sent out a call seeking comments on its engagement efforts. The comment period closed June 19.
“Overall, FSI members expressed concern that by focusing its investor outreach on avoiding bad actors, FINRA is unintentionally making investors associate financial advisors with bad intentions and in turn vilifying the industry,” FSI’s letter to FINRA stated. “In reality, financial advisors play an important role in investor education and we suggest that FINRA shift its focus to the value of seeking financial advice and the tools FINRA provides to investors to identify an advisor they want to work with.”
FSI made suggestions on how FINRA can more effectively engage with member firms, investors and other stakeholders using survey responses of FSI members.
“FSI members noted that FINRA’s industry outreach is focused at the firm level, overlooking registered representatives and associated persons of IBDs,” the letter stated. “As one of the only trade associations that have individual financial advisor members, FSI can play a key role in facilitating outreach between FINRA and financial advisors, whose perspective comes from direct interactions with investors and who are directly impacted by FINRA rules and regulations. Feedback from both FSI member firms and financial advisors raised both overlapping and separate concerns. For example, firm compliance staff report that Weekly Update emails are very helpful and useful, while many financial advisors are unaware of the email subscription service. Both advisors and firms report that FINRA’s interactive tools are helpful to investors and they refer clients to the calculators and Mutual Fund Breakpoint tool.”