FINRA-Registered Firms, Reps Continue to Decline

The total number of broker-dealers registered with FINRA continues to decline, falling 2.5% from 3,607 in 2018 to 3,517 in 2019, according to the self-regulator’s 2020 industry snapshot report. In total, FINRA lost 90 firms last year.

The total number of registered representatives dropped 0.7%, with 629,529 registered representatives in 2018 versus 624,674 in 2019. Of the total number of representatives in 2019, 328,997 were registered with broker-dealers only while 295,677 were dually registered.

Fewer than 40,000 representatives joined the brokerage industry last year — the lowest number of FINRA registrations since at least 2005, the first time this information was provided in FINRA’s report. That year, there were more than 63,000 new entrants.

In the last five years, the total number of large firms decreased by 7%, mid-sized firms went up 2% and small firms went down 12%. Additionally, the report reaffirmed that FINRA membership still consists overwhelmingly of small firms. Of the 3,517 FINRA registered firms, 3,151 of them are considered small (less than 50 RRs), which makes up approximately 90% of the market.

The top five most common marketing methods filed with FINRA in 2019 were: web information public access (25,578), fund specific information sheet(s) (14,860), flyers & other hand delivered material (5,585), brochures, pamphlets, & catalogs (5,022) and periodic & other performance reports (3,454).

Additionally, five states that hold the vast majority of firms (by headquarters) include New York (1,038), California (406), Illinois (205), Texas (201) and New Jersey (145).

According to FINRA’s Chief Economist Jonathan Sokobin, “the Snapshot provides visibility into the broad range of firms, individuals and trading activity that FINRA oversees. This year’s edition includes new data on markets activity, including fixed income and equity trading by venue and product type.”

To review the complete snapshot, click here.