Registered reps, firms in brokerage industry decline: new Finra report

Regulator publishes first-ever snapshot of sector it oversees

Aug 9, 2018 @ 1:11 pm

By Mark Schoeff Jr.

The number of brokers and brokerage firms have declined for the last several years, according to statistics released Thursday by Finra.

The Financial Industry Regulatory Authority Inc. report shows that 630,132 people were registered representatives with the regulator in 2017, down from 635,902 in 2016. The high point for registered reps was 643,322 in 2015. Other than that year, their numbers have never exceeded 636,000 since 2009. The greatest loss of registered reps happened in 2009, when 72,564 left the industry.

Brokerage firms also have been dwindling, according to the report, Finra Industry Snapshot 2018. Finra regulated 3,726 firms in 2017, a decline from 3,835 in 2016 and 4,146 in 2013.

The vast majority of brokerages registered with Finra are defined as small firms: 3,353 in 2017. Midsize firms totaled 195 and large firms totaled 178 last year.

(More: 10 biggest adviser moves in the first half of 2018)

The report also illustrates adviser and firm breakdowns by type of registration.

In 2017, 55% of Finra-registered people were with broker-dealers only, while 45% where dually registered with brokerages and as investment adviser representatives. Finra oversees dual registrants.

In the entire securities industry, 50% are registered with broker-dealer only, 41% are dual registrants and 8% are investment adviser only. The Securities and Exchange Commission and states regulate financial professionals who are registered only as investment advisers.

The number of firms registered only as investment advisers has risen from 24,147 in 2008 to 29,599 in 2017, while the number registered only as brokerages has declined over that period from 3,969 to 3,132. The number of dually registered firms has fallen from 926 in 2008 to 594 in 2017.

The report is the first of its kind that Finra has published.

"The Snapshot is designed to increase awareness and understanding about the broad range of firms, individuals and trading activity that Finra oversees," the regulator said in a statement. "Consistent with the transparency goals of the Finra 360 organizational-improvement initiative, for the first time Finra is sharing a statistical overview based on the data it collects in the course of its work."


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