The FINRA 2023 Industry Snapshot was recently released and gives industry participants an inside look at trends from the previous period, with topics ranging from the number of FINRA-registered individuals to the overall revenues of firms.
Here are our key takeaways:
Firms Fall, Registered Reps Rise
Continuing with the four-year trend, the number of FINRA-registered brokerage firms fell in 2022 to a total of 3,378 firms, down from 3,607 firms in 2018. However, unlike the brokerage firm trend, the number of registered representatives increased in 2022 with a total of 620,882 registered representatives. The uptick comes after three years of steady decline since 2018. As for registration types, the reps were pretty evenly split between registered as only brokers (308,565) and dually registered as brokers and investment adviser representatives (312,317).
Small Firms Reign as King
As reported in the snapshot, the FINRA regulatory landscape is still dominated by small firms (0-150 reps), even though the number of small firms dropped from 3,048 in 2021 to 3,021 in 2022. The number of large firms (500+ reps) jumped from 161 in 2021 to 165 in 2022. As for medium firms (151-499 reps), the numbers grew to 192 in 2022, up from 185 in 2021.
Brokerages Feel Market Downturn Impact
Financial suffering was felt by all sizes of brokerages in 2022, as a result of the market downturn. FINRA-registered firms collected a net pretax income of $42.3 billion, a staggering drop from 2021’s $91.6 billion. Total revenues fell to $350.5 billion in 2022 from $398.5 billion in 2021. Total expenses rose to $308.2 billion in 2022 from $306.9 billion in 2021.
To read FINRA’s full report, click here.