What You Need to Know
- FINRA put out a request for comment on diversity and inclusion in April.
- Some insurance group commenters are asking for new age- and gender-related efforts.
- Some commenters say the diversity project has nothing to do with protecting investors.
One way to support women in the U.S. broker-dealer industry could be to conduct licensing renewal exams every five years, rather than every two years.
Diane Boyle and Maeghan Gale, staffers at the National Association of Insurance and Financial Advisors (NAIFA), offered that suggestion in a comment letter sent to the Financial Industry Regulatory Authority.
One FINRA question was, “What, if any, FINRA rules or market practices have a disparate impact on individuals in the broker-dealer industry (on the basis of national origin, language, age, gender, race, color, ethnicity, socioeconomic status, religion or spiritual practice, disability, sexual orientation, gender identity, family structure or veteran status) or discourage participation in the broker-dealer industry?”
The NAIFA commenters said requiring FINRA license holders to take a major licensing exam every two years is burdensome.
“There are many reasons that a registered person might want to retain their exams/licenses for longer than two years, including working mothers who wish to take time off to care for children,” the NAIFA commenters said. “A longer period, such as five years, would more easily allow mothers to return to [the] workforce as their children reach school age.”
Rebecca Parrish, an individual in the financial services industry, also asked FINRA to let registered persons go longer between exams.
“Many other professions allow for licensing to be held as long as continuing education is current,” Parrish said.
The NAIFA commenters also talked about FINRA rules that require would-be registered persons to get financial services companies to act as sponsors.
“Only firms with more robust resources may be in the position to hire candidates without the necessary licenses,” the NAIFA commenters said. “This added obstacle likely results in less diverse hiring, especially within organizations lacking diversity themselves. Expanded offerings of FINRA exams without sponsorship requirements has far reaching potential benefits for firms and candidates alike.”
The NAIFA commenters and those from other life and annuity organizations also asked FINRA to consider letting registered persons take exams and use marketing materials written in languages other than English.
Clifford Kirsch and Eric Arnold wrote, on behalf of the Committee of Annuity Insurers, that FINRA will give candidates who speak English as a second language extra time to complete qualification exams.
“However, FINRA does not administer qualification exams in languages other than English,” the Committee of Annuity Insurers reps wrote. “The committee believes that by administering qualification examinations in English only, FINRA has created a barrier to entry into the broker-dealer industry for individuals who do not speak English as their primary language and have limited ability to read, speak, write or understand English.”
Reducing the language barrier is important, because many investors speak languages other than English, and they need financial professionals who speak their own languages, the reps said.
Here are other comments from life and annuity groups and other commenters: