Securities Industry Essentials (SIE) ExamUnderstanding Trading, Customer Accounts, and Prohibited ActivitiesMedium
A registered representative receives a verbal complaint from a client regarding a recent transaction. The client expresses dissatisfaction but does not allege any wrongdoing or request monetary damages. According to FINRA rules, how should the representative handle this situation?
- AThe representative must immediately forward the complaint to a qualified principal for review and potential reporting.
- BThe representative should attempt to resolve the issue directly with the client and does not need to report it to a supervisor.
- CThe representative should document the complaint for their personal records but is not required to take further action.
- DThe representative must advise the client to submit the complaint in writing before any action can be taken.
Show answer & explanationAnswer & explanation
Correct answer: A. The representative must immediately forward the complaint to a qualified principal for review and potential reporting.
Under FINRA rules, any written or verbal complaint alleging a grievance must be forwarded to a qualified principal for review. Even if it doesn't allege wrongdoing or monetary damages, it still constitutes a complaint and must be handled according to the firm's supervisory procedures.
Why the other options are wrong
- B. Attempting to resolve it directly is generally not permitted without supervisory involvement, and reporting is required.
- C. Personal documentation is insufficient; supervisory review and firm record-keeping are mandatory.
- D. While written complaints are preferred, a verbal complaint is still a complaint and must be addressed immediately without requiring it to be put in writing first.
Customer Complaint Handling
FINRA rules require that all customer complaints, whether written or verbal, be promptly forwarded to a qualified principal for review and resolution. Firms must maintain a record of all complaints and their resolution.
- Includes both written and verbal complaints.
- Must be forwarded to a principal immediately.
- Principal reviews and determines appropriate action.
- Records must be kept for a specified period (e.g., 4 years).
Memory trick: Complaint: Hear it, report it, review it, log it.