FINRA, or the Financial Industry Regulatory Authority, refers to a self regulatory body formed in 2007 when the NYSE and NASD merged. FINRA is the principal regulator for securities firms doing business in the United States. According to the FINRA website, FINRA oversees nearly 4,900 brokerage firms, about 173,000 branch offices and approximately 651,000 registered securities representatives. FINRA oversees both the regulation and operation of the NASDAQ and the over the counter (OTC) markets. The organization is managed by a Board comprised of both individual investors and representatives from the securities industry.

Structured Product Risks are a Hot Topic

Structured products are hot. U.S. sales rose 46 percent in 2010 to $49.5 billion. The appeal is understandable in the wake of the financial crisis. As folks in the indexed annuity business know, a floor of principal protection or "guaranteed" income combined with some upside potential is an easier sell in the current environment. Structured products also happen to be a hot topic with regulators. For example, FINRA just issued a warning to investors about structured products with principal...

First Lose No Money

Is there a financial equivalent to the maxim “first do no harm?”

What if one of the guiding principles of medicine was applied to the world of financial advice?

What would the financial services landscape look like if product manufacturers and advisors were required to play by rules similar to those that exist for physicians?

First, my guess is that the financial corollary to the application of primum non nocere (first do no harm) would be:

  • First do not lose money.

I have had countless conversations over the past year or so with people who cannot believe they are actually paying to hear someone tell them that they are in relatively good shape because their portfolio has outperformed some index by fifty basis points.  ...

Finra Arbitration Futility

There is an interesting article in the Wall Street Journal about Finra arbitration and whether some of the new rules will help investors with grievances.

Finra or the Financial Services Regulatory Authority is a securities industry regulator (that happens to be funded by the securities industry) that, among other things, governs disputes between investors and brokers.

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Financial Advisor Licensing, Appointments and Affiliation

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Annuity Digest Buying Guide: Financial Advisor Regulation

All annuity sales require an insurance license, and some require both insurance and securities licenses.  Licensing is not a huge challenge, but there is time, effort and cost involved in the process.


Variable Annuity Related FINRA Arbitration Cases Triple in 2009

The Financial Industry Regulatory Authority ("FINRA") has reported that the number of arbitration cases related to the sale of variable annuity products increased from 47 cases in 2008 to 123 cases in 2009. Overall, the number of arbitration cases surged 43% to 7,137. This increase in investor grievances is not surprising given what a difficult year 2009 was for many. Investment News reports that many of the variable annuity cases involve "products with risky subaccounts and clients over age 60...
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