FINRA-Registered Financial Professionals
As you consider a particular person or firm to help manage your finances—or as you construct a team to help you—here’s what you need to know about FINRA-registered financial professionals.
Who They Are
FINRA-registered financial professionals are personnel who work for broker-dealer firms and hold FINRA registrations and state licenses. Broker-dealers are in the business of buying and selling securities—stocks, bonds, mutual funds and certain other investment products—on behalf of their customers (as broker), for their own accounts (as dealer) or both. Commonly referred to as brokers or stockbrokers, FINRA-registered financial professionals who buy and sell securities for customers are technically known as registered representatives.
Who Regulates Them
With few exceptions, broker-dealer firms must register with the Securities and Exchange Commission and be members of FINRA. Individual professionals at these firms must register with FINRA, pass a qualifying exam and be licensed by your state securities regulator before they can do business with you. You can obtain background information on broker-dealer firms and their registered financial professionals—including registration, licensing and disciplinary history—by using FINRA BrokerCheck or calling us toll-free at (800) 289-9999. You can also contact your state securities regulator.
If you have concerns about possible misconduct by a FINRA-registered professional, contact the firm’s branch manager or compliance department to see if you can resolve the issue. If you aren’t satisfied with the firm’s response, you can file a complaint with FINRA.
What They Offer
Broker-dealer firms vary widely in the types of services they offer, falling generally into two categories: full-service and discount firms.
- Full-service firms typically charge more for each transaction, but they tend to have large research operations that their registered financial professionals can tap into when making recommendations, can handle nearly any kind of financial transaction you want to make and might offer investment planning or other services, as well as apps and an array of investment information.
- Discount broker-dealer firms usually have lower fees and expenses, but you might have to research potential investments on your own—though firm apps and websites might provide substantial information and tools that you can use.
The products that FINRA-registered financial professionals can sell you depend on the licenses they hold. For example, an individual who has passed the Series 6 exam can sell only mutual funds, variable annuities and similar products, while the holder of a Series 7 license can sell a broader array of securities. When a FINRA-registered financial professional suggests that you buy or sell a particular security, they must have reason to believe that the recommendation is in your best interest based on a host of factors, including your income, portfolio and overall financial situation; your tolerance for risk; and your stated investment objectives.
Some FINRA-registered financial professionals are separately registered as investment adviser representatives and provide advisory services on behalf of a registered investment adviser (RIA). In some cases, the broker-dealer itself is also registered as an RIA. When working with a dually registered financial professional, be sure you know which role they’re filling in order to understand what services they’re providing and what this will cost you. Both broker-dealers and SEC-registered RIAs are required to furnish you with a customer relationship summary form (Form CRS), which can help you compare services offered and costs of these services between the different entities.
Learn more about working with an investment professional.
