The total number of FINRA-registered representatives continued its decline for the third straight year in 2018, although the decline was far smaller than in previous years, according to the regulatory agency's second annual industry snapshot. However, there were some bright spots, as the gap between the number of registered representatives entering and leaving the industry continued to close.
FINRA unveiled its first industry snapshot last year to serve as a deeper dive on the data the agency collects. The report includes data on the size and geographic distribution of FINRA-registered firms, the number of representatives working within the industry, as well as information on firms’ trading and marketing services and products, with FINRA Chief Economist Jonathan Sokobin saying that snapshot served "to provide visibility into the broad range of firms, individuals and trading activity that FINRA oversees."
According to the 2019 report, the total number of registered representatives regulated by FINRA dropped from 630,273 in 2017 to 629,544 in 2018. While it is lower, it is not as steep as the drop between 2016 and 2017, in which the total number of registered representatives declined by more than 5,000 (in 2015, FINRA-registered reps totaled 639,4457). However, the average number of FINRA-registered reps per firm increased from 163 in 2015 to 175 last year, indicating a slight growth in firm size over time.
The smaller decline of FINRA-registered representatives in the past year is due in part to the fact that while more representatives left the industry than entered it last year, the gap was far lower than in previous years. In 2018, the number of reps entering the industry increased for the first time since 2015, rising from 40,903 in 2017 to 43,810. In contrast, 46,274 reps left the industry in 2017, compared to 44,539 last year.
The trend of reps moving away from solely operating as a broker/dealer to working as dual representatives also continued unabated last year (dual representatives refers to those who are both FINRA-registered representatives and also registered as investment advisor representatives). The number of broker/dealer reps dropped from 399,438 in 2009 to 334,860 last year, while in the same time period, the number of dual representatives climbed from 231,473 to 294,684. This trend may be due in part to the increased number of large advisor networks, including Carson Group and Commonwealth Financial Network, who are allowing and even encouraging brokers in their networks to abandon their FINRA registrations and move toward fee-based advisor services.
