FINRA’s arbitration process is now open to registered investment advisors (RIAs). Formerly, the system was only available for industry complaints involving securities firms and broker-dealers.
This Website Is For Financial Professionals Only
The move to open the arbitration system to RIAs is separate and apart from FINRA’s quest to become the self-regulatory organization (SRO) that oversees investment advisors.
Taking a claim outside of an SRO to the court system is much more expensive than FINRA arbitration. FINRA opened the process to RIAs at the request of industry attorneys.
FINRA operates the largest dispute resolution forum in the securities industry. It has closed 3747 arbitration cases this year as of September 30. Over the same period, 3394 new cases were opened.
The number of cases closed was down 17% from 2011 and the number of new cases filed was down 8%. FINRA will announce the new policy
soon and says that several arbitration cases from RIAs are already filtering through its system.