FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationOpening and Maintaining Customer Accounts and Investment RecommendationsHard
A client is opening an account and requests to have all trade confirmations and account statements sent to their vacation home address in a different state, which is not their primary residence. What action should the registered representative take?
- ARefuse the request, as all mail must be sent to the client's primary residence.
- BForward the request to a principal for approval, ensuring the request is in writing and a valid reason is provided.
- CInform the client that only trade confirmations can be sent to an alternate address, but not account statements.
- DProcess the request as is, as long as the client verifies the vacation home address.
Show answer & explanationAnswer & explanation
Correct answer: B. Forward the request to a principal for approval, ensuring the request is in writing and a valid reason is provided.
FINRA Rule 3110(c) requires that if a member organization sends correspondence to a client at any address other than the client's primary residence, it must obtain the client's written request and a valid reason for the alternate address, and a principal must approve the arrangement. This is a measure to prevent fraudulent activity or other issues.
Why the other options are wrong
- A. Refusing the request outright is not necessary; alternate addresses can be used under specific conditions.
- C. There is no distinction in the rule between trade confirmations and account statements for this requirement; both require the same process.
- D. Simply verifying the address is insufficient; written request, valid reason, and principal approval are required.
Alternate Address Mail Delivery
Sending client correspondence to an alternate address (not primary residence) requires the client's written request, a valid reason for the request, and approval by a firm principal.
- Applies to all client correspondence (confirmations, statements).
- Requires client's written request.
- Requires a valid reason for the alternate address.
- Requires principal approval.
Memory trick: Alternate mail needs a 'WRP' (Written, Reason, Principal approval).