During a speech on Monday at the Finra conference, the regulator's boss, Rick Ketchum, discussed a wide array of topics. Those included the SRO's concerns about potential conflicts of interest at brokerages, as well as the selling of complex investments without proper due diligence.
But Mr. Ketchum dropped one small bombshell in his speech -- one that is likely to please most reps out there. As you recall, Finra officials in February indicated they were considering, among other things, posting broker's test scores on BrokerCheck, the regulator's public database. The proposal did not sit well with some reps or their advocacy groups. Yesterday, however, Mr. Ketchum said Finra is not interested is collecting or publicizing such info. Here's what he said:
"For the next phase, we're interested in ideas for expanding the range of information we disclose in BrokerCheck, updating the way in which that information is presented, and increasing investor awareness of BrokerCheck. In February, we issued a Notice requesting comment on our proposed changes and received numerous comments. We've heard your concerns about whether your test scores will be revealed. I want to stress that that's not the type of information we're interested in disclosing."
Finra's decision may well be due to the comment letters sent to the SRO decrying the idea. “I believe publishing test scores makes no sense for someone who has been in the business for over 25 years,” April Kvalvik, a broker with
Bank of America Merrill Lynch, wrote in one letter.
“As a [certified financial planner], I have mastered many complex areas in investing and
financial planning. I do not think that scores from a 25-year-old test are relevant,” Ms. Kvalvik wrote.
“Such scores reflect only the knowledge of regulatory requirements at the time of the test, and not investment knowledge or any relevant industry skills. In fact, the very act of publishing such scores would be misleading, as it connotes validity ... in selecting a broker,” wrote David Wiley, president of Wiley Bros.-Aintree Capital LLC.
Catherine O'Brien, a representative at Crowell Weedon & Co., went a little further. In her comment letter, she wrote: “I would like the grades of all Finra and SEC employees, schools they attended, last 10 years of employment, criminal history ... bankruptcy filings and any financial judgments ... made public,”
Mr. Ketchum did not address that suggestion in his speech.
(Dan Jamieson contributed to this blog post)
