CFP Board Calls on FINRA to Address Unpaid Arbitration Awards

On May 1, 2026, CFP Board submitted a comment letter to the Financial Industry Regulatory Authority (FINRA) in response to its Regulatory Notice 26-06, which aims to modernize FINRA's arbitration rules, guidance, and processes. In the comment letter, CFP Board emphasizes the critical need for FINRA to solve the serious problem of unpaid arbitration awards. It is unacceptable that approximately one in four arbitration awards granted to investors who win arbitration proceedings goes entirely uncollected, with approximately 37 cents of every dollar awarded remaining unpaid.

This current practice is not sustainable for the everyday American. A consumer who has been harmed should not be left without meaningful recovery. FINRA has many potential solutions (such as insurance or a dedicated fund) that are both affordable and effective. FINRA's failure to implement one of these solutions undermines consumer trust in financial advice.

CFP Board's comments focus on two other areas that are especially consequential for investor protection and professional accountability, including preserving existing safeguards around motions to dismiss and strengthening and modernizing FINRA's Arbitration Awards Online (AAO) database. In each of these areas, CFP Board urges FINRA to prioritize reforms that enhance transparency, reduce information asymmetries, and ensure that arbitration outcomes are fair for investors.

To read the full letter, please click here.