Key compliance takeaways for broker-dealers from FINRA’s latest data on industry concentration, market structure, options activity, customer leverage and supervisory controls
FINRA’s 2026 Industry Snapshot: What Broker-Dealers Should Take From the Data
FINRA’s 2026 Industry Snapshot, published in June, is an annual report based on data FINRA collects and maintains through its regulatory oversight of member firms and work it has done for other regulators. It is not an examination report, enforcement notice, or rule proposal. It is a data report from which we can learn important takeaways.
These data describe the environment in which FINRA is setting examination priorities, evaluating supervisory systems and allocating regulatory resources. The 2026 edition depicts a broker-dealer industry with:
- More registered professionals
- Fewer member firms
- Growing dual registration
- Record equity trading
- Rapidly expanding options activity
- Meaningful off-hours trading
- Rising customer margin balances
- Renewed private placement activity
Key FINRA Trends for Broker-Dealer Compliance Teams
Registered Representatives Are Up While FINRA Member Firms Are Down
Several trends stand out. FINRA reported 639,723 registered representatives at year-end 2025, an increase of approximately 5% from 2021. At the same time, the number of FINRA member firms declined from 3,394 to 3,184. More than half of FINRA-registered representatives, or 331,802 individuals, were also registered as investment adviser representatives. During this period, member-firm aggregate revenue reached approximately $776.8 billion and pre-tax net income approached $115.0 billion in 2025.
Trading Volume, Options Activity and Extended-Hours Markets Continue to Grow
Trading activity also accelerated. FINRA reported that average daily dollar volume in exchange-listed NMS stocks reached approximately $828 billion in 2025, more than one-third above 2022 levels, while average daily listed-options transactions rose to 8.4 million, approximately 50% above 2023 levels. Zero-days-to-expiration options accounted for roughly 30% of options transactions during 2025. FINRA also called out the continuing growth of trading outside normal market hours. For compliance and legal departments, the practical point is not that any one statistic creates a new obligation. Rather, the Snapshot identifies where operational scale, product complexity, customer behavior, supervisory capacity and business-model convergence are placing greater pressure on existing obligations under the federal securities laws and FINRA rules.
How Broker-Dealers Can Use FINRA Snapshot Data for Risk Assessment
Firms should use the data as a benchmarking and risk-assessment tool, particularly when evaluating supervision, Reg BI, options controls, communications, margin, private placements, dual-hat activities, branch oversight, and the adequacy of surveillance across an increasingly concentrated industry.
Broker-Dealer Compliance Takeaways from FINRA’s 2026 Industry Snapshot
- More professionals, fewer firms. The registered-representative population continues to grow even as the number of FINRA member firms declines. The result is a heavier concentration of personnel, customer accounts, trading volume, and compliance responsibility in fewer firms.
- Dual registration is now the predominant professional model. More than half of FINRA-registered representatives are also investment adviser representatives. That raises the stakes for capacity disclosures, conflicts controls, books and records, communications review, and supervision across brokerage and advisory platforms.
- Market activity is expanding and fragmenting across time and venue. NMS equity volume reached record levels, OTC share volume represented 50.6% of consolidated NMS shares in 2025, and off-hours and overnight trading continued to grow. Supervisory and surveillance systems must reflect when and where business actually occurs.
- Options risk is becoming more immediate. Average daily options transactions rose sharply and 0DTE contracts represented roughly 30% of 2025 options transactions. Firms active in retail options should reassess approval, education, suitability/Reg BI, margin, communications, and real-time supervision.
- Customer leverage deserves renewed attention. The Snapshot shows a substantial increase in aggregate customer margin debit balances in 2025. Firms should consider whether credit controls, concentration monitoring, liquidation practices, disclosures and supervisory escalation remain calibrated to current market activity.
- Private capital activity is recovering. Private placement filings increased in 2025, including material activity in manufacturing/real estate, banking and financial services, and technology. That trend warrants continued focus on reasonable-basis due diligence, conflicts, compensation, communications and filing obligations.
- The industry’s strong financial performance raises the compliance-execution bar. Aggregate member-firm revenues and pre-tax income increased materially in 2025. Growth and profitability can support investment in supervision and technology, but they can also increase regulatory expectations that compliance infrastructure keeps pace with business scale.
Industry Concentration: More Registered Representatives, Fewer Broker-Dealers
FINRA counted 639,723 registered representatives at year-end 2025, compared with 612,392 in 2021. That was the fourth consecutive year of growth in the registered-representative population. FINRA also reported that 46,795 individuals entered FINRA membership in 2025, compared with 41,570 who left. At the firm level, the direction was the opposite: FINRA member firms declined from 3,394 in 2021 to 3,184 in 2025. Small firms continued to constitute the overwhelming majority of member firms, with 2,832 of the 3,184 firms at year-end 2025, while 197 firms were mid-size and 155 were large. Yet large firms accounted for approximately 83.7% of registrations by firm size. This divergence matters. A smaller population of firms is supervising a larger population of registered professionals. For large and consolidating firms, the resulting risk is scale: more representatives, more branches, more products, more systems and more data to supervise. For small firms, the risk is resource intensity: even if business volume is modest, FINRA rules generally do not excuse a firm from maintaining reasonably designed supervisory and compliance systems because it has fewer personnel.
Dual Registration Compliance: Brokerage and Advisory Activity Need Clear Controls
The Snapshot reports 331,802 dual broker-dealer/investment adviser representatives at year-end 2025, compared with 307,921 broker-dealer-only representatives. Put differently, approximately 52% of FINRA-registered representatives were also registered as investment adviser representatives. The data also show movement into dual registration: 11,294 broker-dealer-only representatives at year-end 2024 were dual representatives by year-end 2025.
For dually registered firms and financial professionals, the operational challenge is not simply maintaining two registrations. It is ensuring that the firm can identify the capacity in which a recommendation or service is provided, apply the correct standard of conduct, deliver accurate disclosures, supervise compensation and conflicts, preserve appropriate records, and prevent communications or account workflows from obscuring whether the customer is receiving brokerage or advisory services. The growth of dual registration reinforces the need for integrated but capacity-sensitive compliance architecture. Firms should test whether surveillance, account coding, compensation systems, marketing review, outside-account data and representative training accurately distinguish broker-dealer and advisory activity, rather than assuming that a single workflow can satisfy both regimes without adjustment.
Strong Broker-Dealer Financial Results Raise Expectations for Compliance Infrastructure
FINRA member firms reported approximately $776.8 billion in aggregate revenue and $661.8 billion in aggregate expenses in 2025, producing approximately $115.0 billion in pre-tax net income. Aggregate revenue was up substantially from approximately $398.5 billion in 2021. The data also show that large firms account for the dominant share of both revenue and expenses. Financial strength does not itself create a compliance requirement. It does, however, affect the context in which regulators evaluate whether a firm’s systems are reasonably designed for its business. A firm experiencing rapid growth in revenue, customer accounts, representatives, product offerings or trading volume should expect to explain how staffing, supervisory technology, testing, escalation and governance have scaled with the business. For boards and senior management, this is a useful governance question: are compliance and supervisory resources growing in line with the risks that are driving revenue? A mismatch can become significant during an examination, particularly where a firm has documented growth but relies on manual controls or legacy systems designed for a materially smaller business.
Extended-Hours Trading and Market Structure: Surveillance Must Match When Customers Trade
FINRA described 2025 as a record year for U.S. stock trading. Average daily dollar volume in NMS stocks reached approximately $828 billion, more than one-third above 2022 levels. The Snapshot also reports that OTC share volume represented 50.6% of total consolidated NMS share volume in 2025, up from 42.0% in 2022. The timing of trading is also changing. The Snapshot breaks out early-morning, pre-open, post-close and overnight/non-business-day trading, and the charts show off-hours trading as a meaningful and rising component of activity, with a notable increase in overnight and non-business-day trade counts during the fourth quarter of 2025. For firms that provide or route extended-hours trading, the compliance implications include market-access controls, best-execution reviews, customer disclosures, liquidity and volatility considerations, order handling, surveillance coverage, system availability, staffing, and escalation outside traditional market hours. Firms should confirm that their controls are not designed around a 9:30 a.m. to 4:00 p.m. assumption if their customers and systems operate well beyond that window.
0DTE Options and Retail Options Trading: Same-Day Risk Requires Real-Time Supervision
Listed-options activity expanded sharply. FINRA reported average daily options transactions of 8,426,479 in 2025, compared with 5,604,625 in 2023, an increase of approximately 50%. Average daily options dollar volume increased from approximately $21.6 billion in 2023 to approximately $37.7 billion in 2025. The Snapshot gives separate attention to 0DTE options. It indicates that contracts expiring on the same business day represented roughly 30% of options transactions during 2025. The monthly chart shows that 0DTE’s share of transaction count generally increased over the year, while 2+ DTE contracts continued to represent the substantial majority of dollar volume.
The growth of short-dated options should prompt firms to revisit whether traditional controls remain adequate for products whose risk can change materially over hours rather than days or weeks. Areas for review include options-account approval, customer qualification, Reg BI and recommendation controls, complex-product training, communications, margin methodology, concentrated positions, same-day exercise/assignment processes, liquidation protocols and intraday surveillance. For firms offering self-directed options trading, the absence of a representative recommendation does not eliminate supervisory, disclosure, communications, margin or operational obligations. Firms should also consider whether digital prompts, product design, default settings, educational content or engagement features could constitute recommendations or otherwise influence customer behavior in ways that warrant heightened review.
Customer Margin Balances: Broker-Dealers Should Reassess Leverage Controls
The Snapshot’s customer-margin chart shows aggregate debit balances in customers’ securities margin accounts rising materially in 2025, to roughly $1.2 trillion based on the year-end graphical data. That is well above 2024 and approximately double the 2022 level shown in the chart. Free credit balances in cash and securities margin accounts remained substantial but did not increase at the same rate.
For carrying firms, leverage can amplify both market and conduct risk. Firms should assess whether margin requirements, house requirements, concentration add-ons, stress testing, liquidation procedures, customer communications and escalation thresholds reflect the current size and volatility of customer exposures. Introducing firms should likewise understand how their clearing arrangements allocate responsibility for monitoring, communication and liquidation decisions. The data also have a Reg BI dimension where representatives recommend transactions or strategies involving margin. Costs, including margin interest, must be considered as part of the overall recommendation analysis, particularly where leverage interacts with active trading, options, concentrated positions or short-term strategies.
Digital Communications and FINRA Advertising Filings: Governance Across Websites, Email, Text and Social Media
FINRA received 68,414 advertising filings in 2025, of which 60,006 were mandatory and 8,408 were voluntary. Web information available to the public was the most common marketing method filed with FINRA, with 30,891 filings, followed by fund-specific information sheets at 14,620. Email, instant messaging, SMS and text messages accounted for 4,376 filings. The filing mix reinforces what firms already experience operationally: communications compliance is increasingly digital, continuous and distributed across multiple channels. Firms should maintain an inventory of approved channels, clear ownership for content review, retention and supervision, and controls for representatives who use mobile or social platforms. The data are also relevant to FINRA’s separate 2026 proposal to modernize Rule 2210 toward a more risk-based supervisory approach; firms should be prepared to explain their communications risk taxonomy regardless of whether that proposal is ultimately adopted.
Private Placements and Capital Formation: Renewed Activity Calls for Due Diligence
FINRA reported 2,567 private-placement filings under Rule 5123 in 2025, up from 2,344 in 2024, and 340 member private-offering filings under Rule 5122, up from 216. A separate industry breakdown reports 2,907 private-placement initial filings in 2025, with manufacturing/real estate, banking and financial services, and technology among the largest categories. The increase should keep private-placement controls high on firms’ risk assessments. Firms participating in offerings should continue to focus on reasonable-basis due diligence, issuer and offering risks, conflicts, compensation, use of proceeds, communications, sales-practice obligations, filing requirements and documentation of supervisory review. For retail distribution, Reg BI and product-specific risks should be incorporated into the firm’s recommendation framework rather than treated as a separate after-the-fact review.
Action Items for Broker-Dealers After FINRA’s 2026 Industry Snapshot
- Benchmark the firm’s risk assessment against the Snapshot. Compare the firm’s growth, representative population, branch footprint, product mix, trading volume, margin exposure, communications channels and private-placement activity with the trends FINRA is seeing across the industry.
- Test for scale risk. Where the business has grown, confirm that supervisory headcount, compliance testing, surveillance capacity, exception management, technology and management information have grown with it.
- Reassess dual-hat controls. Dually registered firms should test account and representative coding, capacity disclosures, conflicts, compensation, recordkeeping, marketing review and escalation between brokerage and advisory businesses.
- Expand surveillance to the hours customers actually trade. If the firm permits pre-market, post-market or overnight activity, confirm that surveillance, market-access controls, customer support and escalation cover those periods.
- Refresh options governance. Review account approval criteria, education, communications, margin, intraday risk, complex-product controls, exercise and assignment processes, and surveillance for short-dated options.
- Stress-test customer leverage. Evaluate whether margin and concentration controls remain appropriate under higher customer debit balances and more active markets.
- Review digital communications governance. Inventory websites, email, messaging, text, social media, mobile-app content and AI-assisted communications. Confirm pre-use/post-use review, retention, supervision and exception handling are documented and operating.
- Treat private-placement growth as a supervisory signal. Confirm due diligence, offering review, conflicts, compensation, filing and sales-practice controls remain fit for the current volume and issuer mix.
- Use the data in annual supervisory and compliance testing. The Snapshot is well suited to inform Rule 3120 testing, Rule 3130 processes, branch risk assessments, annual compliance reviews, and board or senior-management reporting.
FINRA 2026 Industry Snapshot FAQs for Broker-Dealers
Does the 2026 Industry Snapshot create new compliance obligations?
No. The Snapshot is an aggregate data report, not a rulemaking or enforcement action. Its importance is contextual: it identifies industry trends that firms can use when assessing whether existing supervisory and compliance systems remain reasonably designed for their current business and risk profile.
Why should a small broker-dealer care about an industry concentration trend driven by larger firms?
Because the decline in the number of small firms is itself meaningful. Small firms remain the large majority of FINRA members, but they often operate with limited compliance and technology resources. The practical issue is whether a smaller firm can demonstrate that its supervisory system is appropriately tailored and effectively implemented, not whether it can replicate a large firm’s infrastructure.
What is the most important dual-registration statistic?
At year-end 2025, 331,802 FINRA-registered representatives were also investment adviser representatives, more than the 307,921 broker-dealer-only representatives. Dual registration is therefore no longer a niche business model; it is the predominant model among FINRA-registered professionals.
Does the Snapshot say 0DTE options are unsuitable or impermissible?
No. The report provides trading data, not a legal conclusion about the product. The compliance significance is the speed and scale of the activity. Firms should confirm that product governance, recommendation controls, disclosures, margin, surveillance, and operational processes are appropriate for same-day-expiration risk.
How should firms use the Snapshot in examinations?
The report can serve as a benchmarking reference for a firm’s written risk assessment, annual testing, supervisory control reviews, and discussions with exam staff. Firms should avoid treating national aggregates as direct peer comparisons unless the business models are genuinely comparable, but the trends can help explain why a control area was prioritized and how the firm assessed emerging risk.
Conclusion: Turning FINRA Industry Data Into Compliance Action
FINRA’s 2026 Industry Snapshot describes an industry that is simultaneously growing and concentrating. More individuals are registered; fewer broker-dealers remain. Dual registration is dominant. Equity and options trading are expanding, market activity is pushing further outside traditional hours, customer leverage has increased, and private capital formation has rebounded. At the same time, member firms are reporting historically strong aggregate financial results. Those developments do not rewrite the rulebook. They do, however, change the operating environment in which existing rules must be applied. Supervisory systems designed for lower volumes, simpler business models, narrower trading windows, less leverage or clearer separation between brokerage and advisory services may no longer be sufficient without meaningful testing and adjustment.
Broker-dealers should therefore treat the Snapshot as more than an industry almanac. Used thoughtfully, it is a practical risk-management document: a way to compare the firm’s current business with broader industry trends, identify areas where growth may be outpacing controls, and focus compliance resources before those gaps appear in an examination, investigation, customer complaint, or enforcement matter.
About Robert Moreiro
Robert Moreiro is a Securities Regulation Partner with Practus, LLP. He has more than 20 years of experience advising broker-dealers, registered investment advisers, financial institutions and associated persons on securities regulation, compliance, regulatory examinations, investigations and enforcement matters. He previously served as Senior Counsel in FINRA’s Enforcement Department and has served as Chief Compliance Officer and AML Compliance Officer for regulated financial-services firms. He is recognized in the 2025 and 2026 editions of The Best Lawyers in America for Securities Regulation and holds the Investment Adviser Certified Compliance Professional and Certified Securities Compliance Professional designations.
