This year’s 2023 FINRA Annual Conference was jam-packed with informative breakout sessions and thoughtful discussions about hot industry topics and things to keep in mind for the future of FINRA-registered firms and representatives. With over 2,400 in-person and virtual attendees, this year’s conference kicked off with remarks from FINRA President and CEO Robert Cook, who set the stage and tone for the rest of the week’s activities.
While there were many different sessions that covered a wide variety of industry-related topics over the three-day event, there were a few issues that seemed to make an appearance in every session. Each of these repeatedly discussed topics hit issues that firms can expect to see be major focus areas for regulators now, and in the coming years.
Below are the top four takeaways that give an insider look at the key topics discussed by industry expert panelists.
Reg BI remains a priority for all
By far the most discussed topic at the conference; panelists took many deep dives into Reg BI and the well-timed release of the SEC’s third staff bulletin, providing expert advice about what registered representatives should take away from the letter. The bulletin, released in late April, focused on the ‘duty of care’ registered reps have when it comes to their client’s best interests. Panelists made sure to drive home the idea that reps need to be constantly looking for reasonably available alternatives when recommending products to investors and that documenting the recommendation process, while not required, is highly encouraged. The panelists stressed that firm policies and procedures concerning the care obligations outlined in the bulletin will be targeted during examinations.
Remote work is here to stay
An effect of the pandemic, hybrid and remote work appear to be the future of the financial industry. Panelists were in agreeance that some, if not most, positions can be completed at home with the same efficiency and comfort level as in-office work. FINRA, it seems as well, has acknowledged that the world we live in is changing with their remote inspection pilot program proposal (now withdrawn, but will be re-submitted soon) that was submitted to the SEC at the end of last year. While there are some practical considerations to the shift (i.e., a new staff member will most likely need to work in person until trust is built), the opportunities for the industry to evolve and collaborate seem to outweigh the remote work hesitancy. For example, the 2022 FINRA industry snapshot reported the number of registered representatives increased last year, leading panelists to speculate if the flexibility of remote work is a factor in that growth.
Protecting senior investors resounds across the industry
It was made clear that the issue of senior investors being the primary targets of fraud is a top priority in the eyes of the industry. Panelists agreed that lots of training and education must be done across the industry in order to spot red flag warning signs and better understand clients. Establishing a client baseline in order to look for weird or unusual movements was an idea that panelists gave to the audience. Documentation, another underlying conference theme, of fraud or dodgy situations can also help with identifying the root causes of these unfortunate circumstances. In all, panelists summarized that this is ‘the one issue that the industry is aligned with FINRA and the SEC’, emphasizing that everyone is trying to do the right thing and protect senior investors from these situations.
Training, training, and more training
The biggest takeaway from the FINRA conference is that with every issue that was broached, the need for reps to be fully educated and trained on the matter closely followed behind. For example, the care obligations emphasized in the SEC’s staff bulletin highlighted the notion that firms should be constantly assigning relevant and updated Reg BI trainings to their reps. Like what was briefly mentioned in the paragraph above, industry leaders want reps to have the tools to pick out red flags and concerning movements in order to protect investors. Overall, if there’s anything to take away from this year’s conference, it’s staying up-to-date on industry issues and understanding that there’s no such thing as too much training.
At Quest CE, we understand the importance of training (literally, it’s in the name). For more information about training on any of the topics discussed at the FINRA conference, contact us here. Additionally, courses can be searched for in our course catalog.