How Long Does FINRA Arbitration Take? A Step-by-Step Timeline
Investors who have suffered losses due to broker misconduct often ask a simple but important question: how long does FINRA arbitration take to recover my money?
The answer depends on several factors, but most cases filed with the Financial Industry Regulatory Authority (“FINRA”) follow a fairly predictable timeline. In general, FINRA arbitration cases take 12 to 18 months from filing to final award, though some resolve sooner through settlement.
Below is a step-by-step breakdown of what to expect.
Step 1: Filing the Statement of Claim (Month 0)
The process begins when your attorney files a Statement of Claim with FINRA. This document outlines:
- The facts of your case
- The alleged misconduct (unsuitable investments, misrepresentation, etc.)
- The damages you are seeking
Once filed, FINRA formally opens the case and assigns a case number.
Timeline: Immediate start
Step 2: Respondent’s Answer (Month 1–2)
The brokerage firm or financial advisor (the “Respondent”) typically has 45 days to file an Answer.
In the Answer, they will:
- Admit or deny the allegations
- Raise defenses
- Possibly assert counterclaims
This early back-and-forth can shape how long a FINRA arbitration takes, especially if the response raises new disputes or involves more than one party.
Timeline: ~1–2 months from filing
Step 3: Arbitrator Selection (Month 2–4)
FINRA provides both sides with a list of potential arbitrators. Each side can:
- Rank preferred arbitrators
- Strike unacceptable candidates
FINRA then appoints a panel of one or three arbitrators, depending on the size of the claim.
Arbitration selection can take time because both sides have an opportunity to review the candidates before the panel is finalized. This stage can also affect how long FINRA arbitration takes if scheduling or other issues slow the process down.
Timeline: ~2–4 months
Step 4: Initial Prehearing Conference (Month 4–5)
Once the panel is selected, an Initial Prehearing Conference (IPHC) is scheduled.
During this call, the parties and arbitrators will:
- Set discovery deadlines
- Schedule hearing dates
- Address preliminary issues
This step essentially creates the roadmap for the case.
The prehearing conference gets everyone working from the same calendar. Deadlines are mapped out, hearing dates begin taking shape, and any early procedural wrinkles can be addressed before they grow into bigger problems.
After arbitrator selection, the prehearing conference gives both sides a clearer sense of what comes next. Discovery may involve limited depositions, along with the exchange of account records, emails, and other evidence relevant to the dispute.
Timeline: ~4–5 months
Step 5: Discovery Phase (Month 5–10)
Discovery is a crucial stage in determining how long FINRA arbitration takes. It’s where both sides exchange documents and evidence. This may include:
- Account statements
- Emails and communications
- Internal firm records
- Compliance documents
Unlike court litigation, FINRA arbitration has limited depositions, which helps streamline the process. Even so, how long FINRA arbitration takes can still depend on how much documentation each side needs to review.
Timeline: ~5–10 months
Step 6: Pre-Hearing Motions & Settlement Discussions (Ongoing)
Throughout the case, both sides may:
- File motions (e.g., to dismiss certain claims)
- Engage in settlement negotiations
Many cases settle before the final FINRA hearing, often during or after discovery. Settlement discussions may become more serious once both sides have seen the evidence.
By that point, the strengths and weaknesses of each side’s position are usually easier to see. That can change the tone of negotiation pretty quickly.
Sometimes, that leads to an agreement. Other times, the case keeps moving toward the FINRA final hearing.
Settlement discussions can happen more than once as new information comes to light. In fact, they may continue even as the parties prepare for the final hearing. With limited depositions and a more streamlined discovery process, the case can keep moving while both sides weigh whether reaching an agreement makes sense.
Timeline: Ongoing throughout the case
Step 7: FINRA Final Hearing (Month 10–15)
If the case does not settle, how long FINRA arbitration takes depends on a final hearing, similar to a trial but less formal.
At the hearing:
- Witnesses testify
- Evidence is presented
- Attorneys make arguments
Hearings may last from a few days to several weeks depending on complexity. By this point, most of the fact-finding has already happened through document exchanges and limited depositions. The hearing is where that evidence finally comes together before the arbitrators.
Timeline: ~10–15 months
Step 8: FINRA Arbitration Award (Within 30 Days After Hearing)
After the hearing concludes, the arbitration panel issues a written decision, known as a FINRA award.
FINRA rules require the award to be issued within 30 days of the hearing’s close.
The award will state:
- Whether damages are granted
- The amount awarded (if any)
- Responsibility for fees
A FINRA award brings the arbitration itself to a close, though the practical impact depends on what the panel decides. For investors, this is often the point at which months of filings, evidence, and hearings finally culminate in a concrete result.
Timeline: ~1 month after hearing
Typical FINRA Arbitration Timeline (At a Glance)
- Filing to Answer: 1–2 months
- Arbitrator Selection: 2–4 months
- Discovery: 5–10 months
- Hearing: 10–15 months
- Final Award: 12–18 months total
What Can Affect How Long FINRA Arbitration Takes?
Not every case follows the same schedule. Factors that may speed up or delay your case include:
- Case complexity (e.g., multiple accounts or products like non-traded REITs or Delaware Statutory Trusts (DSTs))
- Number of parties involved
- Scheduling availability of arbitrators
- Settlement negotiations
- Motions to dismiss or procedural disputes
In some cases, investors may resolve claims in under a year if a favorable settlement is reached early.
Why FINRA Arbitration Is Faster Than Court
Compared to traditional litigation, FINRA arbitration is generally quicker because:
- Discovery is more limited
- There are fewer procedural delays
- Cases are not subject to crowded court dockets
For investors, this means a more efficient path to potential recovery.
Speak With a FINRA Arbitration Attorney
If you believe your financial advisor recommended unsuitable investments or failed to disclose risks, you may be entitled to recover losses through FINRA arbitration.
Understanding the timeline is the first step. Taking action is the next.
With offices in Chicago and Seattle, the securities attorneys at The White Law Group represent investors in claims against their brokerage firms in all 50 states. Please call The White Law Group for a free consultation at (888) 637-5510.
