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 registered financial professionals.
Who They Are
Registered financial professionals are licensed sales personnel who work for broker-dealer firms. 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, registered financial professionals 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 registered representatives, or registered financial professionals, 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.
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 registered financial professionals can sell you depend on the licenses they hold. For example, a registered financial professional 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 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.
Learn more about working with an investment professional.
