Finra defends its authority over B-D's dispensing financial advice

The Financial Industry Regulatory Authority Inc. isn't backing down from its position that it has authority over broker-dealers' financial planning activities.
AUG 19, 2009
The Financial Industry Regulatory Authority Inc. isn't backing down from its position that it has authority over broker-dealers' financial planning activities. Finra executive vice president Tom Selman maintained today it was entirely within Finra's authority to take action against Ameritas Investment Corp., a dually registered broker-dealer and investment adviser based in Lincoln, Neb., and one of its registered representatives, for advertising and sales violations involving misleading financial plans. “Ameritas is a case in which clearly Finra has jurisdiction because Ameritas is a broker-dealer, [the rep] was acting as a broker-dealer, she was selling securities products, and they were all doing this through the broker-dealer business,” he said. “The jurisdiction of Finra is clear.” The Financial Planning Association yesterday urged the Securities and Exchange Commission to restrict Finra's enforcement power. In a letter to SEC Chairman Mary Schapiro, the FPA urged the commission to clarify and restrict the scope of the self-regulatory body's authority. “Due to Finra's absence of legal authority to regulate broad financial planning activities, and to its inability to impose a fiduciary standard that would enhance investor protection, we believe this task is best carried out by the SEC,” FPA president Richard Salmen wrote. Mr. Salmen is also a senior vice president at GTrust Financial Partners of Topeka, Kan., which manages $400 million. On Aug. 6, Finra fined Ameritas $100,000 for not supervising a broker who persuaded customers to take on additional mortgage and home equity debt to buy variable universal life insurance policies that were to be used to fund college expenses and retirement. For the complete report, see the Aug. 24 issue of InvestmentNews.

Latest News

Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says
Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says

A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.

SEC bars New Jersey advisor after $9.9M fraud against Gold Star families
SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.

Navigating the great wealth transfer: Are advisors ready for both waves?
Navigating the great wealth transfer: Are advisors ready for both waves?

After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.

UBS Financial loses another investor lawsuit involving Tesla stock
UBS Financial loses another investor lawsuit involving Tesla stock

The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.

Trump's one big beautiful bill reshapes charitable giving for donors and advisors
Trump's one big beautiful bill reshapes charitable giving for donors and advisors

An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.