What events will trigger a FINRA inquiry?

The longer your career as a financial advisor, the higher your chances of being hit with the dreaded FINRA inquiry. That’s why it’s important to know exactly what will trigger an investigation in the first place. This week, on Ask An AdvisorLaw Expert, we ask AdvisorLaw’s Director of Enforcement, Ben Winograd, J.D., what can trigger an inquiry and what advisors should do when faced with one.


It is absolutely imperative to realize that, no matter which way these events unfold, each step of the process is set up for enforcement to build a case against you. Admissions at any point on this timeline can possibly upend a future settlement or negotiation and cost a financial advisor their entire career.

There is no point in your financial advice career that AdvisorLaw will work harder at protecting your livelihood than when you are subject to a FINRA, state, or licensing board investigation (such as the CFP Board).

If you’re interested in seeing more of these insightful videos, make sure to follow our Enforcement Defense Showcase page as well as our LinkedIn page.


Full transcript:
A FINRA inquiry can be triggered by a customer complaint, by a Form U5 filing, by your firm upon employment separation. It can also be initiated upon referral by some other agencies such as the SEC, a state securities board, or a cycle examination board. FINRA inquiries can begin after your own reporting. FINRA recently nicked a ton of advisors for the late filing of their own liens. Now FINRA has stated that serious customer harm is very important to them and their investigations, and the lack thereof can actually be a mitigating circumstance for you. As soon as you are hit with a FINRA investigation, it’s important that you hire expert counsel as soon as possible. The mishandling of a FINRA inquiry response can result in fines, suspension, or even a bar from this industry.