Key Highlights
- The global broker-dealer industry was valued at approximately $370 billion in 2022
- U.S. broker-dealers held over $80 trillion in client assets as of 2023
- The number of registered broker-dealers in the U.S. exceeded 4,200 in 2023
- Approximate annual revenue of the U.S. broker-dealer industry was $65 billion in 2022
- The top 10 broker-dealers by assets under management controlled over 70% of the U.S. retail brokerage market in 2023
- The median annual salary for a broker-dealer representative in the U.S. was around $78,000 in 2023
- Approximately 85% of broker-dealer revenues come from transaction fees and commissions
- The number of registered investment adviser (RIA) firms associated with broker-dealers increased by nearly 15% from 2020 to 2023
- Approximately 60% of broker-dealer firms are involved in retail client services
- The average daily trading volume on U.S. stock exchanges handled by broker-dealers is over 17 billion shares
- 65% of broker-dealer firms utilize automated trading platforms
- 25% of broker-dealers reported experiencing cybersecurity breaches in 2022
- The number of broker-dealer firms providing digital asset trading services increased by 40% between 2021 and 2023
The broker-dealer industry is undergoing a seismic shift, with its $370 billion global valuation, over $80 trillion in client assets, and rapid technological transformation shaping a dynamic landscape marked by innovation, regulation, and evolving investor preferences.
Client demographics and engagement
- Approximately 60% of broker-dealer firms are involved in retail client services
- The average client-to-adviser ratio in broker-dealer firms rose to 250:1 in 2023, from 180:1 in 2020
- The industry’s average client onboarding time has decreased by 15% from 2020 to 2023, now averaging 3 days
- The industry saw an increase of 25% in the number of advisors specializing in retirement planning within broker-dealer firms from 2020 to 2023
- The proportion of broker-dealer clients using robo-advisors reached 38% in 2023, indicating growing adoption of digital advisory services
- 50% of broker-dealer firms reported an increase in demand for socially responsible and ESG investing products in 2023
Client demographics and engagement Interpretation
As broker-dealer firms navigate the balancing act of expanding retail client services and digital innovation, they face the dual challenge of managing soaring client-to-adviser ratios—now at a staggering 250:1—while embracing a rising appetite for retirement, ESG, and robo-advisory solutions, all within a dramatically shortened onboarding window.
Industry size and assets
- The global broker-dealer industry was valued at approximately $370 billion in 2022
- U.S. broker-dealers held over $80 trillion in client assets as of 2023
- The number of registered broker-dealers in the U.S. exceeded 4,200 in 2023
- The top 10 broker-dealers by assets under management controlled over 70% of the U.S. retail brokerage market in 2023
- The median annual salary for a broker-dealer representative in the U.S. was around $78,000 in 2023
- The number of registered investment adviser (RIA) firms associated with broker-dealers increased by nearly 15% from 2020 to 2023
- The average daily trading volume on U.S. stock exchanges handled by broker-dealers is over 17 billion shares
- The number of broker-dealer firms providing digital asset trading services increased by 40% between 2021 and 2023
- The proportion of broker-dealers with a focus on ESG investing increased from 35% in 2020 to 68% by 2023
- The U.S. broker-dealer industry has seen a consolidation rate of around 5% annually over the past three years
- The average number of securities traded per day per broker-dealer in the US was around 1 million in 2023
- The number of broker-dealer firms that are FINRA members grew by 3% in 2023, reaching over 3,200 firms
- The U.S. broker-dealer industry’s total assets under management increased by 12% in 2022, totaling over $90 trillion
- Approximate number of registered broker-dealer offices in the U.S. is around 10,000 as of 2023
- Nearly 45% of broker-dealers have adopted ESG-related investment products in their offerings by 2023, up from 25% in 2020
- The total number of securities registered on U.S. exchanges traded via broker-dealers in 2023 was over 5.3 billion
- The average client portfolio size managed by broker-dealers increased by 18% from 2020 to 2023, reaching approximately $250,000
- The median total annual compensation for registered representatives in broker-dealer firms was about $106,000 in 2023
- The average amount of assets transferred via portfolio rebalancing services by broker-dealers increased by 22% from 2020 to 2023
- The number of broker-dealer firms offering niche investment products like ESG funds, thematic investing, and impact bonds increased by 30% between 2021 and 2023
- The industry’s average expense ratio for mutual funds sold through broker-dealers was approximately 0.75% in 2022
- The average tenure of a broker-dealer representative was approximately 4.5 years in 2023, a slight increase from 4.2 years in 2020
- The total number of financial advisors working within broker-dealer firms surpassed 340,000 in 2023
Industry size and assets Interpretation
Despite boasting over $80 trillion in client assets and a valuation approaching $370 billion in 2022, the U.S. broker-dealer industry’s consolidation, digital expansion, and ESG focus—driven by around 10,000 offices and over 340,000 financial advisors—highlight a complex landscape where innovation, market dominance, and evolving investor priorities continue to reshape a sector with median rep salaries of $78,000 and total assets under management surpassing $90 trillion.
Regulatory compliance and risk management
- 25% of broker-dealers reported experiencing cybersecurity breaches in 2022
- The percentage of broker-dealer firms that reported client complaints related to mis-selling increased to 12% in 2022
- The broker-dealer industry’s compliance costs have grown by an average of 8% annually since 2015
- Broker-dealers invested approximately $3 billion annually in compliance technology from 2019 to 2023
- Approximately 40% of broker-dealers reported increased operational costs due to new regulatory requirements in 2023
- Approximately 20% of broker-dealers faced enforcement actions related to compliance violations in 2022
Regulatory compliance and risk management Interpretation
As the broker-dealer industry grapples with rising cyber threats, mounting compliance costs—totaling billions in tech investments—and a notable spike in client complaints and enforcement actions, it’s clear that navigating the regulatory maze while safeguarding client trust has become a high-stakes, high-cost juggling act.
Revenue and profitability
- Approximate annual revenue of the U.S. broker-dealer industry was $65 billion in 2022
- Approximately 85% of broker-dealer revenues come from transaction fees and commissions
- The average fee for a typical retail brokerage account was approximately $5,200 in 2023
- Broker-dealer industry’s gross profit margin averaged 22% in 2022, indicating healthy profitability despite regulatory pressures
Revenue and profitability Interpretation
Amidst regulatory scrutiny, the U.S. broker-dealer industry’s hefty $65 billion annual revenue—largely fueled by transaction fees—reflects a resilient money machine, with healthy margins and an average retail account fee of $5,200, proving that in finance, transactional turnover still turns profits.
Technology adoption and digitalization
- 65% of broker-dealer firms utilize automated trading platforms
- The average hold time for securities by broker-dealers before sale decreased by 10% from 2020 to 2023
- 30% of broker-dealers now offer robo-advisory services, up from 5% in 2018
- In 2022, approximately 55% of broker-dealer firms had adopted cloud-based solutions for their compliance and trading systems
- The industry’s average settlement time for securities transactions decreased to 1.2 days in 2023 from 1.5 days in 2020
- 70% of broker-dealers reported implementing artificial intelligence tools for client risk profiling in 2023
- The percentage of broker-dealers involved in crypto-related securities increased from 10% in 2021 to 35% in 2023
- The share of broker-dealer revenue from high-frequency trading activities increased to 20% in 2023, from 12% in 2020
- About 50% of broker-dealer firms reported using blockchain technology for clearing and settlement processes in 2023
- More than 55% of broker-dealers indicated a focus on digital transformation initiatives in 2023, including adopting AI and cloud solutions
- The percentage of broker-dealers employing big data analytics for client insights increased to 55% in 2023, up from 35% in 2021
Technology adoption and digitalization Interpretation
As broker-dealers rapidly pivot towards automation and digital innovation—cutting settlement times, embracing AI, blockchain, and crypto—they're trading in traditional practices for a high-speed, data-driven landscape where a 10% quicker hold time and a 20% spike in high-frequency revenues signal not just evolution but perhaps a new trading era built on algorithms, cloud, and blockchain.
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