More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
The Financial Industry Regulatory Authority (FINRA) announced Wednesday that it has launched a pilot program offering parties in simplified cases pro bono or reduced-fee telephone mediation.
Participation in the pilot program, which began on Jan.15, is voluntary and open to cases involving claims of $50,000 or less, FINRA says.
“Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways,” said Linda Fienberg, president of FINRA Dispute Resolution, in a statement. “Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”
Parties interested in participating in the pilot can notify FINRA by visiting www.finra.org/arbitrationmediation/smallclaims. Also, FINRA says staff will notify eligible parties about the pilot program.
Mediators would serve on a pro bono basis on cases involving claims of $25,000 or less in damages. Reduced-fee mediation ($50 per hour) would be available on cases with damage claims between $25,000.01 and $50,000. FINRA says it will not charge any administrative fee for these cases.