FINRA Investor Survey Reveals Support for Additional Regulatory Protections (with Lofchie Comment and Bonus Survey Question)

FINRA released the results of its survey of U.S. investors, which was designed to measure perceptions of fairness and to gauge demand for additional regulatory protections.

The survey of 1,000 market participants revealed that 92 percent of respondents agreed it is "important to have a regulatory 'cop on the beat' to protect investors and police the markets." Furthermore, the survey found that 74 percent of participants would support additional regulatory protections to safeguard them from misconduct from brokers and financial firms.

Lofchie Comment: It would be interesting to know the purpose of this study given the obvious bias and simplistic design of the questions. It does not really take a survey to reveal that 92% of investors agree with the desire for a cop on the beat of financial regulation, though it is somewhat interesting to find that 30% of investors only "somewhat agreed" with this statement and 5% disagreed (3% didn't know). Also, somewhat more interesting is that the percentage who supported additional regulation was only 56% where it resulted in a "minimal increase" in costs. It would be even more interesting to know what percentage of investors would support additional regulation if it resulted in a moderate increase in costs, or a material increase in costs, or if it resulted in meaningful limitations on the products in which they would be permitted to invest. There could be some benefit in conducting a survey of investors' attitudes towards regulation, and their willingness to bear any attendant costs or investment limitations. But a survey with meaningful results requires asking meaningful questions. Otherwise, you might as well ask, "do you like these cute kitties?" Please respond to [email protected] (and please, cat lovers only).

See: FINRA Investor Survey; FINRA Press Release.