At the Securities Arbitration 2011 program at the Practising Law Institute a few weeks ago (which I Chaired), Linda Fienberg, President of FINRA Dispute Resolution, announced that FINRA has developed a program to permit its arbitration forum to administer disputes between investors and registered investment advisers.  FINRA has developed this plan because the SEC is currently considering whether to annoint FINRA as the self-regulatory organization for RIAs, rather than creating a new SRO.  Fienberg stated that FINRA could accept its first case within nine months of receiving authorization from the SEC or Congress to handle investment adviser arbitrations. 

This development would expand the number of securities industry disputes resolved through arbitration, as most investor-investment adviser disputes are not currently arbitrated.  It will be interesting to see whether arbitrators are more sympathetic to RIA customers because the Investment Adviser Act bestows a statutory fiduciary duty on RIAs, whereas broker-dealers are not automatically in a fiduciary relationship with their customers.