The number of people joining the brokerage industry increased for the first time in several years in 2022, driven by wealth managers joining both pure-play broker-dealer firms and hybrid outfits with an advisory arm.
That's according to the Financial Industry Regulatory Authority's
Increases were seen in both the number of firms registered solely with FINRA, the broker-dealer industry's self-regulator, and so-called hybrid outfits with advisory arms also registered with the Securities and Exchange Commission. The number of pure brokerage firms rose 304,867 to 308,565 from 2021 to 2022 and the number hybrids went from 307,590 to 312,317 over the same two years.
Meanwhile, the total number of firms registered with FINRA continued to decline, suggesting consolidation remains an industry trend. That figure came in at 3,378 in 2022, down from 3,394 the year before.
By contrast, the number of pure advisory firms registered with the SEC or states continued its steady rise, suggesting that fee-only and similar business models remain popular among wealth managers. That figure went from 30,889 in 2021 to 31,669 in 2022.
"The RIA model continues to gain traction, especially amongst the younger generation of advisors," said Mark Elzweig, the president of Mark Elzweig Company, a consultancy for financial advisors.
Those were just a couple of the takeaways from FINRA's report. Here are a few others.