The 2026 FINRA Annual Regulatory Oversight Report offers insight into the focus areas for the year ahead. The report addresses critical compliance issues under Regulation Best Interest (Reg BI), Form CRS, and recommendations involving annuities, rollovers, and account types. The findings emphasize the need for firms to formalize how they assess costs, evaluate reasonably available alternatives, deliver disclosures, and retain proper records. 

Here’s what firms needs to know. 

Cost Assessment and Reasonably Available Alternatives: A Renewed Priority 

FINRA continues to raise the bar on how firms evaluate investment recommendations, especially around cost. The report identifies that many firms fall short in conducting a thorough, well-documented comparison of reasonably available alternatives before making a recommendation. This includes: 

• Recommending products based on outdated or incomplete due diligence 

• Failing to assess lower-cost or better-suited product options 

• Overlooking considerations like liquidity, time horizon, and client profile alignment 

When it comes to rollovers, variable annuities, and account type conversions, the stakes are even higher. FINRA found that some firms recommended annuity replacements (e.g., RILAs replacing variable annuities) without providing a documented rationale demonstrating the client benefit. Similarly, rollover recommendations often lacked a clear comparison of costs, features, and account structures. 

Form CRS: Delivery and Recordkeeping Under Scrutiny 

The report underscores significant deficiencies in how Form CRS is delivered and maintained. Some firms failed to: 

• Deliver the Form CRS in a prominent and timely manner (e.g., not embedding in email footers or generic document packets) 

• Make updated versions accessible on public websites, including DBA domains 

• Track and document delivery, especially following material changes  

In many cases, firms also missed the deadlines for re-filing Form CRS with the SEC and failed to communicate those updates to clients as required. 

Effective Practices Highlighted by FINRA 

To help firms close the compliance gap, FINRA outlined several best practices, including: 

• Developing supervisory procedures that guide advisors on how to evaluate reasonably available alternatives 

• Instituting structured, repeatable processes for making account and product recommendations 

• Documenting recommendations with rationale, including cost comparisons and client suitability assessments 

• Ensuring Form CRS is easily accessible, timely delivered, and diligently tracked, including proof of updates to existing clients 

 

The InvestorCOM Advantage: Turning Regulation Into Workflow 

At InvestorCOM, we help firms operationalize these regulatory expectations through purpose-built compliance technology. Our platform empowers firms to: 

• Evaluate and document reasonably available alternatives & exchanges 

• Deliver, update, and track Form CRS  

• Support complex recommendations like rollovers and annuity exchanges  

 

Recommendations for Firms in 2026 

Given the trends outlined in FINRA’s report, firms should: 

1. Audit their Form CRS delivery and recordkeeping process 
2. Review how advisors evaluate and document recommendations, especially those involving rollovers or annuity products 
3. Implement a structured process for assessing cost and comparing alternatives 
4. Leverage technology to enforce consistency, transparency, and defensibility across compliance practices 

InvestorCOM is here to help firms lead with compliance and build trust through transparent, client-focused recommendations. 

Interested in seeing how our platform can help your firm meet FINRA’s evolving expectations? Contact us for a demo or consultation today.