BrokerCheck needs a marketing effort

Kudos to the Financial Industry Regulatory Authority Inc. for taking steps to increase the amount of information available to investors about brokers on its BrokerCheck system. However, it's time for the organization to get serious about making sure investors know that BrokerCheck exists.

NEW INFO ABOUT BROKERS

Susan Axelrod, Finra's executive vice president for regulatory operations, told an audience at the Financial Services Institute's Financial Advisor Summit in Washington last week that the brokerage industry self-regulator is looking at ways to increase the amount of information found on the BrokerCheck website. Ideas being considered include posting brokers' Series 7 scores on the site. Admittedly, we are dubious that investors are interested in what their broker got on a test he or she took 20 years ago. But we applaud the regulator's efforts to get innovative about the kind of information that could help investors make better decisions about to whom they entrust their savings. That said, what good is a new-and-improved BrokerCheck if many — if not most — investors are unaware it exists? It is estimated that only about 10% of investors use the database to make decisions about investment professionals.

REV UP PROMOTION

We urge Finra to step up its efforts to promote BrokerCheck. One way to do that, of course, is to promote its site in the media and through well-executed advertising campaigns. Another is for Finra to revive a proposal that would have required brokerages to include links on their websites to BrokerCheck. Finra filed such a rule proposal in January 2013 but withdrew it four months later, after it was met with industry opposition. The regulator has worked hard in recent years to improve the usefulness of the information found on BrokerCheck. But all that hard work will be for nothing if investors do not use it.