The U.S. broker-dealer industry continues to shrink in number while growing larger in scale, according to a newly released report from the Securities and Exchange Commission's ("SEC") Division of Economic and Risk Analysis ("DERA"). Financial Advisor News reports that the study tracks the evolving structure of registered broker-dealers from 2010 through 2024, highlighting a 30 percent drop in firms alongside a $1.7 trillion surge in total industry assets.
As of 2024, approximately 3,340 broker-dealers remain registered with the SEC, down from nearly 4,800 in 2010. Yet total assets in the sector have climbed to $6.4 trillion, reflecting a significant consolidation of market share into fewer, larger players. DERA analysts describe this as a continuing trend toward concentration, with substantial implications for competition, client access, and market resiliency.
According to Financial Advisor News, the report details how escalating compliance costs, technology demands, cybersecurity threats, and tightening margins have pushed smaller firms to merge, pivot to RIA models, or exit altogether. In contrast, larger broker-dealers, with diversified services ranging from trading and underwriting to wealth management, have absorbed these expenses more efficiently, expanding their dominance in the process.
This consolidation has fueled a wave of M&A activity, particularly within the independent broker-dealer space. For financial advisors, it has meant fewer firm options but broader investment platforms, better infrastructure, and increasingly sophisticated digital tools, as reported by Financial Advisor News.
The report also notes a shift in broker-dealer revenue models. Transaction-based income has waned in favor of recurring fee structures and interest income, echoing the industry-wide migration toward advisory models and fiduciary accountability.
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