Each year, FINRA publishes its Report on its Examination and Risk Monitoring Program — an unusually transparent preview of the regulatory issues that will receive heightened scrutiny in the coming examination cycle. The 2025 Report identifies several priority areas that compliance officers at FINRA-registered broker-dealers should be actively evaluating now, before the examination team arrives.
Regulation Best Interest and Suitability
The care obligation under Regulation Best Interest continues to generate examination findings across firm types. FINRA examiners are looking specifically at whether firms have documented the basis for recommendations to retail customers — including consideration of reasonably available alternatives and an explicit analysis of costs relative to benefits. Firms that have implemented Reg BI through disclosure updates without addressing the underlying documentation and supervisory review processes remain exposed. FINRA has indicated particular focus on recommendations involving complex products, rollover recommendations from ERISA accounts, and variable annuity exchanges.
AML Program Adequacy and Beneficial Ownership
AML deficiencies — particularly in the area of beneficial ownership under the FinCEN Customer Due Diligence Rule — remain among the most common findings in FINRA's examination program. The 2025 Report signals continued focus on whether firms have implemented compliant beneficial ownership procedures for legal entity customers, including the collection of required ownership and control information at account opening and refresh procedures for existing accounts. Independent testing scope is also under scrutiny — with FINRA finding that some firms' testing engagements have not covered beneficial ownership or have been scoped too narrowly to satisfy Rule 3310(c).
Cybersecurity and Technology Governance
Cybersecurity governance has become a standing examination priority for FINRA. The 2025 Report focuses on: vendor management and third-party risk assessment, multi-factor authentication implementation across critical systems, incident response plan testing and tabletop exercises, and the adequacy of cybersecurity policies relative to the firm's actual technology infrastructure. Firms that have not updated their cybersecurity policies to reflect current technology environments — cloud infrastructure, remote access, mobile device management — face examination exposure regardless of whether they have experienced a breach.
Complex Products and Investor Protection
Structured products, leveraged and inverse ETFs, and options continue to receive examination focus under the Reg BI framework. FINRA examiners are evaluating whether firms maintain written supervisory procedures that address the specific risks of complex products, whether registered representatives receive adequate product-specific training, and whether concentration risk in recommended portfolios is monitored at the supervisory level. Firms that added complex products to their approved product lists without updating supervisory procedures and representative training face compounded exposure.
Branch Office Supervision in the Hybrid Era
The shift to remote and hybrid work arrangements has created supervisory gaps that FINRA is actively examining. The 2025 Report indicates focus on whether written supervisory procedures adequately address the supervision of registered representatives working from non-branch locations, whether electronic communications surveillance has been extended to cover home office communications, and whether branch examination schedules have been updated to reflect the actual locations from which associated persons conduct securities activities.
Consolidated Audit Trail Obligations
CAT reporting obligations have expanded, and FINRA's examination program includes review of member firm CAT reporting accuracy and completeness. Firms that have not implemented adequate CAT reporting oversight — including reconciliation procedures and error correction protocols — face examination findings that can generate regulatory consequences independent of any underlying conduct issues.
The consistent thread across FINRA's 2025 examination priorities is the gap between paper compliance and operational compliance. Written procedures that exist but are not followed, AML programs that have not kept pace with regulatory developments, and supervisory frameworks that predate the Reg BI environment create examination exposure that well-run compliance programs can and should eliminate before the next examination cycle. Compliance officers should use the 2025 Report as a gap assessment checklist — and address the gaps before FINRA does.