In an effort to gauge public opinion on the Finanical Industry Regulatory Authority's proposed data collection program, Wall Street's leading trade group surveyed over 1,000 investors with more than $100,0000 in assets who work with a financial professional. The poll found 69 percent opposed the Comprehensive Automated Risk Data System (CARDS), which would mandate the collection of trading and account data from all brokers. Seven in ten investors said the benefits did not out outweigh the percieved cybersecurity risk.
“The point of the survey was to make sure the investors’ voice was coming through as FINRA goes through the rulemaking process and solicitation of comments and feedback process,” says Ira Hammerman, general counsel of the Securities Industry and Financial Markets Association.
But critics latched on to another number: Only 20 percent were familiar with FINRA to begin with and even fewer, 12 percent, had previously heard of CARDS.
“The survey makes clear that the vast majority of investors don’t have a clue what CARDS is or how it will operate. It then primes them with questions designed to heighten their concerns about online threats to their information security,” says Barbara Roper, director of investor protection for the Consumer Federation of America.
SIFMA said the survey included a "fair and balanced" description of the program. Roper says that by the time respondents reached the questions about CARDS, most failed to take note of the fact that under the proposal, no personally identifiable information would be collected. “The follow up questions are a classic example of push polling, with questions—some biased, some questionable, some clearly inaccurate—designed to heighten respondents’ concerns over a program that a large majority have never even heard of.”
The survey’s 45 questions asked about spending and purchasing habits, as well as the investor's views on cybersecurity. Even before asking about respondents’ familiarity with FINRA, the survey described the regulatory organization as a “quasi-governmental organization.” Roper says the survey tried to capture investors’ negative attitudes and distrust toward government and apply it to FINRA.
Hammerman disputes that. “It’s a realistic description of what FIRNA is. In the old days if we were having this conversation, we’d have characterized it as a self-regulatory organization, but those days are long gone,” he says.
“It seems to me the task of a consumer survey on cards is difficult to do well," says Tiburon's Matt Lynch. "Complex ideas, at least complex to the average investor where the topic has to be explained before asking opinion questions, don't tend to result in effective surveys,” he says.
For instance, Lynch said questions that start with "how concerned are you..." signal to participants unfamiliar with the topic that there is something to be concerned about. “Overall I think the issue with this survey is the topic is just not suited for a consumer survey,” he says.