Finra launches ad campaign for BrokerCheck

Critics say promoting database is worthwhile, but that it doesn't have enough information for investors

Jun 1, 2015 @ 12:36 pm

By Mark Schoeff Jr.

Finra launched a $3.5 million advertising campaign on Monday to encourage investors to research their brokers before hiring them, but some industry observers said Finra's database doesn't provide enough information.

The digital, print and television ads, which will run through the month of June, promote BrokerCheck, an online database managed by the Financial Industry Regulatory Authority Inc. The database provides employment and disciplinary history about brokers, as well as their certifications and licenses.

The ads are hitting the airwaves just days after Finra submitted a rule to the Securities and Exchange Commission for final approval that would require brokers to include a link to BrokerCheck on their websites and brokers' profile pages.

A print ad will run in Tuesday's Wall Street Journal. Digital ads will appear on financial-news websites as well as search engines.

Joe Peiffer, president of the Public Investors Arbitration Bar Association, said BrokerCheck, which is based on information in the Central Registration Depository, is not complete. It leaves out items such as internal firm investigations involving the broker as well as exam scores.

“If they're going to spend all this money on promoting BrokerCheck, why not make it a complete listing of what an investor needs to know about his broker?” said Mr. Peiffer, a partner at Peiffer, Rosca, Wolf, Abdullah, Carr & Kane.

Benjamin Edwards, director of the Investor Advocacy Clinic at the Michigan State University College of Law, said that if investors want to get a complete report about brokers, they need to turn to state-level databases, such as the one that Florida maintains.

“This [additional] information is material for investors,” Mr. Edwards said. “While BrokerCheck is a great resource, it doesn't tell investors everything they should be able to know.”

Even though the information is not as complete as Mr. Edwards would like, he wants to see higher traffic for BrokerCheck.

“One of the best way to protect yourself is to check and make sure the person you're dealing with is licensed,” he said.

One of the 15-second television ads features a man who doesn't realize that pills he's just swallowed would give him “gorilla arms.”

“You wouldn't take medicine without the checking the side effects,” the voiceover says. “So why would you invest without checking BrokerCheck? Check your broker with BrokerCheck.”

Other television ads, created by Ogilvy & Mather, center on a trucker who's oblivious to height restrictions of an overpass, a bride who is shocked by the organ music at her wedding and diner who doesn't realize how spicy his dish is. They will air for five weeks on a variety of cable channels.

The campaign uses humor to make a point that Finra takes seriously – too few investors are utilizing BrokerCheck.

“People immediately go online to check out a new restaurant where they might spend $25 for a meal, but don't think to use BrokerCheck when they're handing over $2,500 – or $25,000 of their life savings or even more – to an investment professional to invest,” Finra chairman and CEO Richard Ketchum said in a statement. “That has to change, and we hope this campaign will help.”

Finra will spend approximately $3.5 million on the ad campaign, which will run through June, according to a spokesman. The organization will use funds generated from disciplinary fines imposed on member firms last year.


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