Do Investors Have Valuable Information About Brokers?

FINRA Office of the Chief Economist Working Paper, August 2015

34 Pages Posted: 29 Aug 2015

Date Written: August 20, 2015


We examine the value of information available to investors through BrokerCheck: the most comprehensive source of information about brokers' professional background and regulatory history that helps investors make informed choices about which brokers to use. We do so by assessing the predictability of investor harm associated with brokers based on BrokerCheck information. We find that BrokerCheck information, including disciplinary records, financial disclosures, and employment history of brokers has significant power to predict investor harm. The 20% of brokers with the highest ex-ante predicted probability of investor harm are associated with more than 55% of the investor harm cases and the total dollar investor harm in our sample. Our findings suggest that investors have access to valuable information that allows them to discriminate between brokers with a high propensity for investor harm from other brokers. We also assess the impact of releasing additional non-public information on BrokerCheck and find that investors may benefit from information about harm associated with brokers’ coworkers.

Keywords: BrokerCheck, Disclosures, Investor harm, CRD

Suggested Citation

Qureshi, Hammad and Sokobin, Jonathan, Do Investors Have Valuable Information About Brokers? (August 20, 2015). FINRA Office of the Chief Economist Working Paper, August 2015, Available at SSRN: or

Hammad Qureshi (Contact Author)

Investment Company Institute ( email )

1401 H Street, NW
Washington, DC 20005
United States

Jonathan Sokobin

FINRA ( email )

1735 K Street NW
Washington, DC 20006-1506
United States
(202) 728-8248 (Phone)
(301) 527-4809 (Fax)

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