The Financial Industry Regulatory Authority (FINRA) has released its 2014 Regulatory and Examination Priorities letter, which highlights significant risks and issues that could adversely affect investors and market integrity this year.
“FINRA remains concerned about the suitability of recommendations to retail investors for complex products whose risk-return profiles, including their sensitivity to interest rate changes, underlying product or index volatility, fee structures or complexity may be challenging for investors to understand,” the letter states.
“These concerns are magnified when there is a strong incentive for the firm or registered representative to recommend the product because of its fee or compensation structure.”
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