Key Takeaways
- FINRA’s 2025 Annual Regulatory Oversight Report 2025-annual-regulatory-oversight-report.pdf included a focus on issues related to retirees and senior investors.
- The Report provides guidance to broker-dealers about the priorities of FINRA in its regulation, supervision and enforcement programs for broker-dealers. In other words, it is one of FINRA’s ways of telling the regulated community that it should be paying particular attention to certain issues.
- Consistent with my focus on retirement plans and retirees, I searched the Report for references to retirement, rollovers, elderly and senior investors. As expected, FINRA did have a lot of concern about those subjects. Here is what I found.
- While the FINRA Report only directly applies to broker-dealers, the issues and concerns apply to investment advisers as well, but the regulator in that case is the SEC.
This article is a sequel to my last one on FINRA’s 2024 Annual Regulatory Report Things I Worry About (9).
Among other things, FINRA is focusing on services and recommendations by broker-dealers and their registered representatives to retirees, senior investors and investors with diminished capacity. To state the obvious, the regulator is concerned about the aging of the Boomers in real time.
The Report discusses the application of Regulation Best Interest (Reg BI) to rollover recommendations. Here is what it says in the section on Failure to Comply with the Compliance Obligation:
Failing to have written policies and procedures reasonably designed or enforced with respect to account recommendations, for example, by:
- not being reasonably designed to address recommended transfers of products between brokerage and advisory accounts or rollover recommendations;…
Continue reading Things I Worry About (10): FINRA Enforcement and Senior Investors (2)