A client calls insisting she ordered 100 shares, not 1,000, and the confirmation is wrong. What you do in the next hour, who you tell, and how you log it can be the difference between a clean cancel-and-rebill and a reportable violation.
A complaint is any grievance about your conduct or a transaction. The moment a customer raises one, your first duty is to inform the appropriate supervisor, a registered principal. You assist the resolution of discrepancies, disputes, errors, and complaints, but you do not adjudicate your own complaint or quietly settle it.
KEY: Written complaints are the trigger. Oral complaints are handled too, but the written ones drive the formal recordkeeping and reporting clocks.
An erroneous report is a confirmation that misstates what actually happened. Distinguish a bad report from a bad trade. If the trade itself is wrong (wrong security, wrong quantity, wrong side), the firm corrects it by a cancel and rebill. The cancel removes the erroneous trade; the rebill posts the correct one.
Common mistakes
- Settling a complaint yourself. Any written complaint goes to a principal; a private payment is a violation even if the customer is satisfied.
- Charging the customer for a firm error. A firm-caused cancel and rebill is borne by the firm, not the client.
- Confusing a bad report with a bad trade. An erroneous report is fixed by issuing a corrected confirmation; a wrong trade needs a cancel and rebill.
Bottom line
- Any written customer complaint goes straight to a registered principal; never resolve it alone or off the books
- FINRA Rule 4513 requires firms to keep records of written customer complaints for at least 4 years at the office of supervisory jurisdiction
- A trade error is fixed by a cancel (erase the wrong trade) and a rebill (post the correct one); the firm, not the customer, absorbs firm-caused error costs
- FINRA Rule 4530 requires firms to report specified events and certain complaints to FINRA, generally within 30 calendar days of knowing
Exam shortcut
Hear "written complaint"? Think Rule 4513 record (4-year retention) plus possible Rule 4530 report (30 calendar days). Firm error means firm pays. Cancel erases the wrong trade, rebill posts the right one, customer kept whole. Code map: 12000 customer arbitration, 13000 industry arbitration, 14000 mediation (voluntary, non-binding); 8000 is investigations and sanctions.
The full lesson (about 1,304 words, 9 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- D13
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