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FINRA Kicks off Proposed BrokerCheck Rule revisions with National Ad Campaign

Thursday, June 4, 2015

On May 27, FINRA filed a rule change with the SEC proposing an amendment to rule 2210 to require each FINRA member’s website to include a “readily apparent reference” and hyperlink to BrokerCheck.

The reference and hyperlink would only need to be included on the firm’s initial webpage and any other webpage that includes a professional profile of one or more registered persons who conduct business with retail investors. This requirement will not apply to directory pages limited to registered persons’ names and contact information.

This rule’s requirements will only apply to broker-dealers that provide products or services to retail investors. FINRA believes this requirement aligns with its goal of increasing retail investor awareness and usage of BrokerCheck.

On June 1, FINRA also launched a national ad campaign promoting BrokerCheck. The ads caution investors to check the backgrounds of individuals they are thinking of engaging before they make their final decision. FINRA showcases the need for checking BrokerCheck in 15-second cable television spots containing humorous examples of people taking action without conducting any background research. A print ad also ran in the Wall Street Journal on June 2.

“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’s savings or even more—to an investment professional to invest,” said FINRA chairman/CEO Richard Ketchum. To help investors make informed choices about brokers and firms “that has to change, and we hope this campaign will help,” he added.

We think the next step may be a “Yelp” for financial professionals. Can’t help but wonder how to monitor such sites for potential customer complaints. It will be interesting to watch as it evolves.

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Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes. 

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