(November 2) FINRA has announced that it’s making its arbitration process formally available to clients of registered investment advisors (RIAs), and the RIAs are unhappy about it.
Now, FINRA regulates broker-dealers, and their clients primarily have recourse in FINRA arbitration. The 28,000 RIAs in the U.S., on the other hand, are lightly regulated by the SEC, and their clients have recourse in court or other private arbitration. Although FINRA arbitration is faster and cheaper, RIAs are vehemently opposed to what some of them see as “mission creep” by FINRA.
(Reuters news service at www.reuters.com)