Securities Industry Essentials (SIE) ExamUnderstanding Trading, Customer Accounts, and Prohibited ActivitiesMedium
A registered representative receives a verbal complaint from a client regarding a recent trade error. According to FINRA rules, what is the FIRST action the registered representative should take?
- AInform the client that only written complaints are accepted.
- BAttempt to resolve the complaint directly with the client.
- CSuggest the client contact FINRA directly.
- DDocument the complaint and forward it to their supervisor.
Show answer & explanationAnswer & explanation
Correct answer: D. Document the complaint and forward it to their supervisor.
FINRA rules require that all customer complaints, whether written or verbal, be promptly forwarded to a principal (supervisor) for review and resolution. The RR should not attempt to resolve it unilaterally.
Why the other options are wrong
- A. Verbal complaints must also be handled and documented; firms cannot refuse them.
- B. RRs are generally prohibited from attempting to resolve complaints themselves; a principal must be involved.
- C. Directing a client to FINRA prematurely is inappropriate and bypasses the firm's internal complaint process.
Customer Complaint Handling
The process by which broker-dealers receive, document, investigate, and resolve customer complaints in accordance with regulatory requirements.
- All complaints (written or verbal) must be documented.
- Must be forwarded to a principal/supervisor immediately.
- Firms must maintain records of all complaints and their resolution.
Memory trick: Complaints: 'Document, Escalate, Resolve.'