A registered representative is an individual who is licensed to sell securities for a registered broker-dealer. A registered representative can be either an employee of or an independent contractor for the broker-dealer. A registered representative receives a percentage of the commission income he generates for the broker-dealer, and/or fees based on assets under management that he brings to the broker-dealer firm. A registered representative must pass FINRA-administered securities examinations, depending on the types of securities he wishes to sell. All registered representatives, including financial planners who execute buy and sell orders for securities on behalf of clients for compensation, must be registered with FINRA and licensed by the appropriate state securities agencies.
A CPA choosing the registered representative business model must be affiliated with a registered broker-dealer (unless the CPA firm or an affiliated entity is registered as a broker-dealer). Registered representatives of a broker-dealer can be compensated by commissions paid by the client or on a fee basis from clients. Non-registered employees cannot participate in securities transactions for clients or share commissions earned.
Structure and Implementation
Registration and Compliance