FINRA: Number of Broker-Dealers and Registered Reps Decline for Second Year
The Financial Industry Regulatory Authority has published the FINRA Industry Snapshot 2018, its first annual statistical report on the brokerage firms, registered individuals and market activity that it regulates, and found that the number of broker-dealers and registered representatives have steadily declined over the last two years.
The Financial Industry Regulatory Authority has published the FINRA Industry Snapshot 2018, its first annual statistical report on the brokerage firms, registered individuals and market activity that it regulates, and found that the number of broker-dealers and registered representatives have steadily declined over the last few years.
According to the report, FINRA-registered broker-dealers, including dual registered firms, dropped from 3,835 in 2016 to 3,726 in 2017, a decline of 2.8 percent. In 2016, 27 more FINRA-registered firms left the industry compared to 2017, but 28 more firms joined the industry during the same period.
In fact, the number of FINRA-registered broker-dealers has dropped 23.8 percent in the last nine years, from 4,895 in 2008 to 3,726 in 2017. However, the number of firms registered only as investment advisers was up 22.6 percent from 24,147 in 2008 to 29,599 in 2017.
In 2017, the total number of FINRA-registered representatives dropped to 630,132, a decline of 0.9 percent when compared to 635,902 reps in 2016. In 2016, 3,965 more reps left the industry than in 2017, but 2,315 more reps joined the industry during the same period. In the last 15 years, the peak year for number of registered reps was 2007 with a total of 672,688 at year end.
In 2017, 55 percent of FINRA-registered individuals were with broker-dealers, while 45 percent were dually registered as a broker and investment adviser. In the entire securities industry, 50 percent were registered with broker-dealers only, 41 percent were dual representatives, and 8 percent were investment advisers only.
The report also includes data ranging from the size and geographic distribution of the firms FINRA regulates, in addition to trading activity and how firms market their products and services.
FINRA regulates brokerage firms doing business with the public in the United States and is overseen by the SEC. The organization writes rules, examines for and enforces compliance with those rules and federal securities laws, registers broker-dealer personnel and offers education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees.
