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How to Check Out a Broker On-Line

How To Check Out A Broker On Line Splash image

Broker information on the Web can be divided into two camps: Sites that provide disciplinary or background information about a broker or firm, and sites that provide customer evaluations of brokerage firms.

Background Checks

Background checks of individual brokers or brokerage firms should be made by using both the FINRA BrokerCheck and by requesting information from your state securities regulator. The Financial Industry Regulatory Authority (FINRA) regulates brokerage firms and their employees. State disclosure programs may provide additional information on brokers licensed by the state. You also should check to make sure that your broker is covered by SIPC (Securities Investor Protection Corp.) insurance—for more on this see the box here.

Financial Industry Regulatory Authority (FINRA)

www.finra.org

On the Investors page, click FINRA BrokerCheck listed on the right-hand side. FINRA BrokerCheck provides information on FINRA-registered firms and their brokers that is required to be reported on the approved industry registration and licensing forms. It also includes disciplinary and disclosure information reported by regulators.

North American Securities Administrators Association (NASAA)

www.nasaa.org

The NASAA is an association of 50 state securities agencies. Click on the Contact Your Regulator link on the home page to obtain the address, telephone and Web site of your state regulator. Your state securities regulator can tell you if a broker is properly licensed within your state, can access the central brokerage registration database, and may be able to supply you with additional regulatory action taken under state securities laws.

Securities Investor Protection Corp. (SIPC)

www.sipc.org

Under Who We Are, click on Member Database to make sure a brokerage firm is an SIPC member.

Broker Ratings

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Our own on-line survey asks members to rate their brokers based on: trade price and speed, reliability and overall satisfaction. To view the ratings, click on Investor Surveys in the Quick Links bar, and then click on the On-Line Discount Broker Survey.

Gomez

www.gomez.com

Gomez helps businesses improve their on-line offerings by measuring Web site performance. At Gomez.com, click on Products and select Competitive Web Performance Benchmarks, then select US Discount Brokerage from the list. The Brokerage Generate Order Benchmark presents the top 13 firms rated by response time, availability, and consistency.

J.D. Power and Associates

www.jdpower.com

A Customer Satisfaction survey conducted in 2008 covers 15 “self-directed” brokerage firms. Customers were asked to rate the firms on a variety of issues including customer service, trading charges and fees, trade execution, information resources, convenience, and account offerings. At the home page, click the Finance tab, then choose Self Directed Investor Firm Ratings from the Finance Ratings list.

Keynote.com

www.keynote.com

Keynote helps businesses measure and improve their on-line offerings. In the process, Keynote created the Keynote Broker Web Transaction Performance Index, which shows the average response times and success rates for 11 major brokerage Web sites. At the home page, click on the Keynote Competitive Research tab; under Performance Indices on the right, click on Industry Indices-US, and then click on E-Brokerage in the Financial Services list. To see the current performance figures, click on View Latest Index Results at the far right of the E-Brokerage page.


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