Tr?id=566623520170033&ev=PageView&noscript=1

ÍøÆØ³Ô¹Ï

FINRA Focuses On Dual Registrant Hybrid Brokers and Investment Advisors

Posted on May 24th, 2023 at 1:37 PM
FINRA Focuses On Dual Registrant Hybrid Brokers and Investment Advisors

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï 

The Financial Industry Regulatory Authority (FINRA) has recently intensified its enforcement efforts to address a concerning issue related to hybrid brokers and investment advisors exploiting their dual status to maximize customer fees and commissions.

Chris Kelly, the acting head of enforcement at FINRA, highlighted that the organization is actively targeting individuals and firms engaged in the “BD-IA arbitrage” by selling a high-commission product in a brokerage account and then rapidly converting that to an advisory account with an annual fee. This is in line with FINRA's commitment to protecting investors and ensuring the integrity and transparency of the industry.

According to FINRA's industry snapshot for 2023, there has been a significant increase in the number of professionals registered both as brokers and advisors, and last year marked the first time that the number of dual registrants surpassed the number of broker-only representatives.

Earlier this year, the Securities and Exchange Commission (SEC) warned firms to be sure customers are aware of the conflicts that dual registrants face, according to AdvisorHub. In a “risk alert” issued in January, the SEC said reps needed to be clear to customers in which capacity they are serving the customer when they made a recommendation.

 

ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

I want to extend a tremendous thank you for your dedication, professionalism, hard work and patient demeanor through this challenging time. It was enjoyable interacting with everyone on your team, this certainly helped while dealing with the situation and working towards resolution.

Dan M.

LATEST NEWS AND ARTICLES

1778171646 Law
May 7, 2026
FINRA Bars Former Raymond James Broker for Refusing Testimony in Unauthorized Trading Probe

A former registered representative with Raymond James has been barred from the securities industry after refusing to cooperate with a Financial Industry Regulatory Authority (FINRA) investigation into alleged unauthorized trading activity.

1778084309 Law
May 6, 2026
FINRA Outlines Key Rulemaking Priorities and Recent Developments in Quarterly Agenda

The Financial Industry Regulatory Authority (FINRA) recently released its Quarterly Regulatory Policy Agenda, offering a detailed view of its rulemaking priorities, pending proposals, and recently approved regulatory changes.

1778000603 Law
May 5, 2026
Commonwealth Financial Network Resolves SEC Conflict of Interest Case

Commonwealth Financial Network has agreed to pay $5 million to resolve a long-standing conflict of interest case brought by the Securities and Exchange Commission, according to reporting by ThinkAdvisor.