The number of brokerage firms in the United States continues to shrink, even as fee-only advisory firms gain momentum—a sign of how quickly the financial services industry is moving away from commission-based business models. According to the Financial Industry Regulatory Authority’s (FINRA) 2025 Industry Snapshot, the number of registered broker-dealers dropped to 2,840 at the end of 2024. That’s down from 2,867 in the previous year and represents a 14% decline from 2020, when there were 3,303 firms in operation.
This ongoing reduction is largely attributed to mergers, closures, and the shifting preferences of both investors and financial professionals. As traditional brokerage models wane, more advisors are choosing to affiliate with fee-only registered investment advisors (RIAs), a structure that typically charges clients based on assets under management rather than commissions on transactions.
Industry analysts point to a combination of regulatory pressure, investor skepticism of high commissions, and the rise of custodial and technology platforms that make it easier for advisors to operate independently. Major custodians like Schwab, Fidelity, LPL, and Pershing have all expanded their support systems for RIAs, offering infrastructure and compliance tools that were once cost-prohibitive for smaller firms or solo practitioners.
The migration toward fee-based advisory services is not just a regulatory trend—it has strong financial implications for investors. For example, research cited by FINRA suggests that a high-net-worth household paying a 2.5% commission over 20 years could lose over $1 million in returns compared to a 1% annual advisory fee model, assuming a 6% return rate.
As more advisors exit traditional broker-dealer affiliations in favor of the flexibility and client alignment offered by fee-only RIAs, many firms are adapting by offering hybrid models. These allow advisors to maintain broker-dealer registration while also serving clients through an RIA—a structure that has grown in popularity as firms seek to provide broader product access.
Though the total number of registered individuals remained relatively stable, FINRA reports 612,457 registered representatives at the end of 2024, a slight uptick from the year before—the makeup of the industry is clearly shifting. Advisors and firms alike are reevaluating their long-term strategies as fee compression, technology, and client expectations reshape how financial advice is delivered and monetized.
FINRA’s data underscores a turning point in the financial advisory landscape. The brokerage model that once dominated retail wealth management is steadily giving way to advisory structures built around long-term relationships and lower perceived conflicts of interest.