FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProcessing Customer Orders and TransactionsMedium
A registered representative receives a written complaint from a client alleging excessive trading (churning) in their variable annuity account. Which of the following is the MOST appropriate initial action for the representative to take?
- AInform the client that their allegations are unfounded and request a retraction.
- BAttempt to resolve the complaint directly with the client to avoid escalation.
- CForward the written complaint immediately to the principal for review.
- DLog the complaint in their personal CRM system for future reference.
Show answer & explanationAnswer & explanation
Correct answer: C. Forward the written complaint immediately to the principal for review.
FINRA rules require that all written customer complaints be forwarded immediately to a principal for review and action. Attempting to resolve it personally or denying the claim are inappropriate and potentially violate regulatory requirements.
Why the other options are wrong
- A. This is unethical and could exacerbate the situation and lead to further violations.
- B. This is inappropriate for a written complaint, which requires principal review.
- D. While logging may occur, it's not the primary or most immediate required action for a written complaint.
Handling Written Complaints
All written customer complaints must be immediately forwarded to a principal for review and appropriate action.
- Applies to all written complaints.
- Principal is responsible for investigation.
- Failure to follow can result in disciplinary action.
Memory trick: Written words, principal stewards.