Customer complaints

Customers are sometimes dissatisfied with the status of their accounts or the service they’re provided. An upset customer can call and voice their displeasure (even yell or scream sometimes), but surprisingly enough, securities regulators do not consider this type of feedback a ‘complaint.’ FINRA Rule 4513 defines a complaint as:

“Any grievance by a customer or any person authorized to act on behalf of the customer involving the activities of the member or a person associated with the member in connection with the solicitation or execution of any transaction or the disposition of securities or funds of that customer”

Additionally, FINRA only considers expressed customer dissatisfaction as a complaint if it is in writing, which includes emails, text messages, and direct messages). When a complaint is received, member firms and their representatives must follow specific protocols (discussed below). Because of this rule, many brokerage firms limit their representatives’ communication methods with their customers. If your firm does not allow you to give customers your personal phone number or email address, this is probably why!

When a representative receives a complaint, they must forward it to their assigned principal (supervisor). Next, the principal works with the registered representative to resolve the issue on behalf of the customer. Member firms must keep a separate file of all customer complaints for at least four years. The file must contain any records related to resolving the complaint, including any action taken or additional correspondence with the customer.

If this rule were to apply to verbal complaints, firms would have a tough time doing business. Registered representatives would be required to note anything negative said by the customer and submit it to their supervisor for review. If you’ve ever worked a service job, you know how often some customers complain (warranted or not). When a customer puts something in writing, it’s usually a serious problem that needs to be addressed.

The modern digital world complicates complaint protocols, especially with social media. If a customer complains by tweet or posts a complaint on Instagram, does it count as a complaint? Generally speaking, FINRA applies its normal rules similarly with social media. A tweet may seem harmless, but it’s technically in writing, requiring the firm to follow the protocols discussed above.