FINRA recently underwent some changes to its BrokerCheck website. For those that do not know, BrokerCheck is the online repository in which the Financial Industry Regulatory Authority (FINRA) discloses certain information about stock brokers, financial advisors, etc. to the public. This information includes employment history, license history, and other information, including investor complaints, arbitration claims, and litigation.
FINRA is the self-regulatory organization charged with protecting investors and preserving market integrity “through effective and efficient regulation of the securities industry.” In other words, FINRA is an organization that is made up of member organizations and individuals who are responsible for regulating themselves for the benefit of the investing public.
FINRA has recently gone through some re-branding of its website. This rebranding included use of new visual components, such as font styles, new icons, and a revised color scheme.
With that in mind, let’s take a look at FINRA’s “new” BrokerCheck site.
The BrokerCheck site is designed and marketed to individual investors as a place to check out the “employment history, certifications, and licenses—as well as regulatory actions, violations or complaints” investors “might want to know about” their financial advisor or a financial advisor they may be contemplating entrusting with their financial future. BrokerCheck also provides similar information about Broker-Dealer firms.
In the past, the BrokerCheck site was a plain and relatively unattractive resource.
As shown above, the “old” BrokerCheck website included FINRA’s logo and was designed with primarily black text with blue and red accents (and no icons). It was utilitarian. However, it appears utilitarian was no longer acceptable. FINRA appears to have wanted something more aesthetically pleasing.
Please understand that I do not have anything against updating a website (having updated my firm’s website in the last year). However, the purpose of a regulator is a bit different than the purpose of a company.
FINRA’s use of color on the BrokerCheck site – and the BrokerCheck report investors can generate on the site – is interesting. The use of two colors stands out. The primary color is blue and the secondary color is a shade of orange. In addition to the revised color scheme, FINRA has implemented the use of four icons that represent the primary areas of the BrokerCheck report.
The first thing that stands out about these icons is that they are definitely consistent with FINRA’s color scheme – like the BrokerCheck website, the icons are blue and orange.
There is a variety of research that discusses the impact that visual components have on individuals. This is why companies spend millions of dollars on making not only their products, but their packaging and other marketing materials so “visually appealing.” Research has shown that using different font styles creates a different opinion of a product. Other research has shown that using rounded graphics has a different impact on consumers than using graphics with squared edges. Perhaps some of the most discussed – and interesting – research reveals the psychological impact that color has on consumers. In fact, research has revealed that “people make up their minds within 90 seconds of their initial interactions with either people or products” and that as much as 90 percent of a consumer’s evaluation of a product “is based on colors alone.” The same research concluded that “prudent use of colors can contribute not only to differentiating products from competitors, but also to influencing moods and feelings – positively or negatively – and therefore, to attitude towards certain products.”
FINRA’s choice of colors is, itself, very interesting. As noted above, two colors predominate: blue and orange. The color blue is generally used in marketing to create the perception of trust. The color orange is also frequently used to convey trustworthiness (as well as to stimulate confidence).
So what is the take away from this? It seems FINRA is doing everything possible to convey a sense of trust to investors that use the BrokerCheck site. However, is that really the message that should be sent? The whole purpose of the site is to provide disclosures about financial advisors. What is even more concerning is FINRA’s choice of color in the “Disclosure Event” section of the report. In that section, which discloses criminal convictions, customer complaints, arbitration claims and litigation, and regulatory actions, FINRA has opted to go with an icon that is a blue flag with a minuscule orange U-shaped base.
Criminal convictions, customer complaints, arbitration claims and litigation, and regulatory actions are “red flags” that investors should be concerned about when evaluating a financial advisor. However, rather than go with the “traditional” red flag to draw investors’ attention to this section, FINRA is using a color that is synonymous with trust to highlight the section of the BrokerCheck report that should, in all honesty, reflect matters for which investors should have the least amount of trust.
Even if FINRA wanted to stay with its branded color scheme, it could have used an icon that had an orange flag with a blue flag pole. While the color orange does not generally signify danger or caution, it would at least stand out in the sea of white and blue of the online BrokerCheck report. Instead, of the four icons that are used on the online report, the icon used in the Disclosure Event section is the least obvious. It is sad when branding/marketing gets in the way of performing the task an organization is charged with doing. However, FINRA is a self-regulatory organization that is made up of member firms that operate in an industry fraught with marketing that is designed to persuade investors to “trust us.” Rather than deviate from that course, FINRA chose form over substance.
If FINRA is trying to draw investors’ attention to previous complaints, regulatory actions, and criminal convictions, it should revise the icons it uses in its BrokerCheck report to something that will attract investors’ attention. I know it does not fit the color scheme, but a “red flag” should be represented by a red (not blue) flag.