The regulator has a tall pile of concerns on its desk, but appeared not to directly spell out whether the erosion of an industry protocol dating back to 2004 is a cause for alarm.

The Financial Industry Regulatory Authority, the not-for-profit organization overseeing the US brokerage and advisory sector, said it will scrutinize how firms cope with disasters and continue serving clients, and set out a list of other issues to watch for 2018. However, it did not explicitly comment on signs that a 14-year-old industry "protocol" over defecting advisors had been hit by firms pulling out of that agreement.

FINRA set out a range of topics that it wants to focus on this year in its 2018 Regulatory and Examination Priorities Letter. Among the topics identified are fraud, high-risk firms and brokers, operational and financial risks – including technology governance and cybersecurity – and market regulation.

The organization also looks at sales practice risks, including recommendations of complex products to unsophisticated, vulnerable investors; protection of customer assets and the accuracy of firms’ financial data; and market integrity, including best execution, manipulation across markets and products, and fixed income data integrity.

Natural disasters such as last year's Hurricane Harvey, for example, prompted FINRA to examine what firms are doing to ensure business continuity plans are in place and are robust.

The letter did not, as far as this publication could establish, refer to recent cracks in a pan-industry agreement, aka "protocol", governing how firms treat rivals in the event of advisor defections. Last year, Morgan Stanley, Citigroup and UBS withdrew from the protocol, formed originally in 2004, under which firms undertook to waive lawsuits when firms defected to join rivals. Morgan Stanley said it was walking away in anger at what it said were abuses of this system. The departures of three large firms has prompted speculation the entire pact will unravel.

Family Wealth Report has contacted FINRA for comment on this matter and may update in due course. A report by Barron's, the magazine, cited a spokesperson from FINRA as saying it has no specific view on the protocol. "Finra is apparently going to let brokerages and breakaway brokers fight it out over the issue of who owns the client," the publication said. FINRA only has rules on handling disputs but not those concerning rules about who owns a client.

Other areas of concern in FINRA's letter included cyber-security, money laundering, high-risk advisors, investment suitability, leverage and best execution.