AAA vs. FINRA Arbitrations - Transcript

Triple-A is different from FINRA arbitrations in a number of ways so claims that the American Arbitration Association (AAA) are similarly handled as FINRA arbitrations meaning you file a complaint there’s some discovery and ultimately you have a hearing.

Triple-A arbitration has arbitrators that tend to be extremely high quality but they are extremely expensive. So, many investors prefer FINRA arbitration because they’ve already lost a lot of money.

And there’s some debate about whether or not it’s fair to force investors into aaa which many registered investment advisors do.

The good thing about FINRA over AAA is that if you do not pay a FINRA arbitration award your license is taken away.

So there’s a high incentive that once you go to arbitration if you get an award they will pay it because they don’t want to lose their license.

You know collection can be a terrible thing and in my business I’ve been fortunate over the years I’ve never really had collection issues because of this this uh benefit to FINRA arbitration.

Also FINRA arbitration every finner arbitration filed gets reviewed by FINRA regulatory, the enforcement arm, so that puts a bit of pressure on firms to settle sometimes because they don’t want things to come out that may happen in the investigation or that you cooperate with the investigation so there are some benefits to FINRA arbitration.