The discovery this month of an accidental leak of complaint data against brokers on the Web site of the Investment Dealers Association of Canada is embarrassing for the IDA. But it’s the provincial regulators who should be ashamed, as the episode highlights the dreadful disclosure investors receive.

When the IDA implemented its complaints and settlement reporting system, it was hailed as a great leap forward in the self-regulator’s ability to police its members — enabling it to adopt a more risk-based approach to regulation and focus its resources on weeding out the truly bad apples.

However, for the most part, investors have been left in the dark. Provincial regulators advise investors to check the registration of anyone attempting to sell them investments. That might protect them from the most brazen hucksters, but it does little to guide them in choosing a quality financial advisor. Checking registration isn’t anywhere near as easy, or as informative, as it should be.

Despite the IDA building the national registration database at considerable expense, ordinary investors don’t have access to it. For them, checking registration is a province-by-province chore, and the ease of access and quality of disclosure varies widely.

Even then, investors don’t get any information as to whether a broker they might hire has left a string of angry clients in his wake. Other than the inadvertent glimpse uncovered by investor advocate Rob Kyle on the IDA’s Web site, investors can’t typically examine much of the employment history of a broker.

Yet, in the U.S., NASD Inc. provides prospective investors with a vast array of information on brokers, from criminal convictions and regulatory actions to pending civil proceedings, complaints, investigations and arbitrations. This info is not limited to reporting the fire of proven wrongdoing; investors can see the smoke, too.

In any transaction, retail investors are at a tremendous disadvantage — the imbalance of information is heavily in favour of the broker and the firm. Regulators should be on the side of investors by ensuring they have as much information as possible. Moreover, the regulatory enforcement process, and the courts, are so incredibly slow that waiting to disclose judgments also effectively leaves investors perilously uninformed. It’s time clients are truly given the opportunity to know their broker.