FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProcessing Customer Orders and TransactionsEasy
A registered representative receives a written complaint from a client alleging excessive trading (churning) in their investment account. What is the immediate and most critical action the representative must take?
- AAttempt to resolve the complaint directly with the client to avoid escalation.
- BDocument the complaint in their personal log for future reference.
- CAdvise the client that the allegations are unfounded.
- DForward the written complaint immediately to their principal.
Show answer & explanationAnswer & explanation
Correct answer: D. Forward the written complaint immediately to their principal.
FINRA rules require that all written customer complaints be immediately forwarded to a principal for review and resolution. A registered representative cannot resolve a written complaint independently.
Why the other options are wrong
- A. Attempting to resolve it directly is inappropriate and could violate firm policy or FINRA rules.
- B. While documentation is important, it is not the immediate and most critical action; forwarding to a principal is paramount.
- C. This is inappropriate and could be seen as an attempt to dismiss a legitimate concern without proper review.
Handling Written Complaints
Registered representatives must immediately forward all written customer complaints to a principal for proper review and resolution.
- Applies to all written complaints, regardless of perceived merit.
- Representatives cannot resolve written complaints themselves.
- Principal is responsible for investigation and reporting.
Memory trick: Written Woes? Whisk to a Principal!