FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProfessional Conduct and Ethical ConsiderationsMedium
A registered representative (RR) is informed by a client that their mailing address has changed. The client requests that all future account statements and trade confirmations be sent to their new address. What is the RR's primary responsibility in processing this request?
- AForward the request to the firm's operations department and assume they will handle the verification.
- BVerify the change of address request with the client using a reliable method (e.g., written confirmation, phone call to a pre-existing number) before updating the system.
- CInform the client that only written requests for address changes can be accepted.
- DUpdate the client's address in the firm's system immediately based on the client's verbal request.
Show answer & explanationAnswer & explanation
Correct answer: B. Verify the change of address request with the client using a reliable method (e.g., written confirmation, phone call to a pre-existing number) before updating the system.
To prevent fraud and unauthorized account access, RRs must verify change of address requests with the client using a reliable method before updating the firm's records. Simply updating based on a verbal or unverified request is a security risk.
Why the other options are wrong
- A. While operations will update, the RR has a primary responsibility to ensure the request itself is legitimate and verified before passing it on.
- C. While written requests are ideal, firms often have protocols for verifying verbal requests, making this too restrictive.
- D. Updating based solely on an unverified verbal request is a significant security risk and potential fraud vector.
Change of Address Verification
The process of confirming a client's request to change their mailing address or contact information to prevent fraudulent activity.
- Essential for preventing identity theft and unauthorized withdrawals.
- Requires verification using a reliable method (e.g., call to recorded number, written confirmation).
- Must be promptly updated after verification.
- Firm procedures dictate specific verification steps.
Memory trick: Address changes? Verify, verify, don't just go and modify.