FINRA's 2025 "Industry Snapshot" Shows Previous Trends Continuing
Commentary by Steven Lofchie
In its 2025 Industry Snapshot, FINRA reported a continuation of previous trends, including as to the decline in the number of broker-dealer firms, geographic shifts away from New York and California and the continued movement of equities trading from traditional exchanges to alternative trading systems. (See previous coverage.)
FINRA said the number of registered broker-dealer firms declined continuing a long-term trend. The number of large broker-dealers declined by nearly 200 firms since the end of 2020. The number of large firms (those with 500 or more registered representatives) fell from 165 in 2020 to 149 in 2024.
Notwithstanding the decline in broker-dealers, FINRA found that the number of advisers rose, from from 28,712 in 2015 to 32,090 at the end of 2024. FINRA highlighted a trend toward dual registration of associated persons stating that in 2024, 323,039 individuals were registered as both broker-dealer and investment adviser representatives, slightly more than the 311,469 registered solely as broker-dealer representatives. FINRA reported that in 2015, there were somewhat over 350,000 individuals solely registered only broker-dealer representatives and somewhat over 250,00 individuals that were dually registered.
FINRA reported that state-level data showed uneven growth in the number of associate persons. In 2024, California, New York and Florida experienced below-average growth in registered individuals, while Texas saw a significantly higher increase. Over a ten-year period, New York and California saw substantial declines in the number of FINRA-registered firm headquarters. New York dropped from 989 in 2020 to 925 in 2024, and California from 399 to 321. In contrast, the overall number of firms headquartered in Florida rose from 180 to 251.
FINRA reported that equities trading increasingly moved away from traditional exchanges toward alternative venues. FINRA said that Alternative Trading Systems and Over the Counter venues account for a growing share of both transaction volume and dollar volume, reducing the dominance of exchanges.
FINRA reported that the number of filings (with FINRA) for public offerings dropped nearly 50 percent from 2,304 in 2020 to 1,209 in 2024.
Commentary
Regulation may be a major factor in driving the securities business from being conducted away from broker-dealers and into investment advisers. (See, generally, Choose One - Best Interest or Full Service.)
A firm that intends to offer customers any personalized advice is generally better off doing so as an investment adviser. Whether this is good or bad may be open to debate; more worrisome is the trend toward investors receiving their advice from social media.
The one number that really jumps out is the decline in the number of filings for public offerings. There is no way to describe that trend as anything other than worrisome.
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