By John Wasik
(Reuters) – In an ideally-transparent world, you’d know as much about your broker as you know about the ingredients in packaged junk food label: All of the bad stuff would be instantly on display.
But in the U.S., some of the most important information about a broker is off limits to individual investors.
At present, you can do broker background checks through a web-based system run by the Financial Industry Regulatory Authority, the trade group that regulates the securities industry (FINRA), called BrokerCheck (brokercheck.finra.org).
Or contact your state securities regulator. FINRA’s site contains incomplete records, since it’s self-reported. And while state regulators often have fuller reports, most investors will probably not know that they are available, and those regulators may not always be accessible nor may their reports be user-friendly.
The information gap between state authorities and FINRA has existed for years. FINRA, which has been slowly improving disclosure (see link.reuters.com/raw86s), is now seeking comments – send emails to firstname.lastname@example.org – from the public on how to improve the service.