What Is a Registered Representative (RR)

A registered representative (RR) is a person who works for a client-facing financial firm such as a brokerage company and serves as a representative for clients who are trading investment products and securities. Registered representatives may be employ🐲ed as brokers, financial advisors, or portfolio managers.

Registered representatives must pass licensing tests and are regulated by the 澳洲幸运5开奖号码历史查询:Financial Industry Regulatory Authꦑority (FINRA) and the Securities and Exchange Commission (SEC). RRs must furthermore adhere to the suitability standard. An investment must meet the suitability requirements outlined in FINRA Rule 2111 prior to being recommended by a firm to an investor. The following question must be answ🎃ered affirmatively: "Is this investment appropriate for my client🌳?"

Understanding Registered Representatives (RRs)

Registe꧂red representatives can buy and sell securities for clients. They are primarily known as transaction-based service providers. To carry out these transactions a registered representative must be licensed to sell the designated securities. They must also be sponsored by a firm registered with FINRA.

To become licensed as a registered representative for a sponsoring firm, a person must pass the 澳洲幸运5开奖号码历史查询:Series 7 and 澳洲幸运5开奖号码历史查询:Series 63 securities examinations. These exams are administered by FINRA. The Series 7 license allows the registered representative to buy and sell stocks, mutual funds, options, municipal securities ('munis'), and certain variable contracts (e.g. insurance or annuity products) for their clients. Since October 2018, Series 7 candidates are required to pass the 澳洲幸运5开奖号码历史查询:Securities Industry Esꦛsentials (SIE) Exam as well as the Series 7 in order to be registered as a General Securities Representative.

The Series 63 license allows the representative to trade variable annuities and unit investment trusts. A substantial portion of the Series 63 exam is focused on state securities requirements across the U.S. Other licenses may also apply for various other types of transactions. RRs may also obtain the 澳洲幸运5开奖号码历史查询:Series 65 and/or 澳洲幸运5开奖号码历史查询:Series 66 licenses in order to expand their set of allowable activities.

Standards for Registered Representatives

Investors seek registered representatives to carry out financial market transactions on their behalf as brokers (or "agents"). Registered representatives typically have access to a full range of market trading capabilities that fit the needs of their inv𓃲estors. They may also be able to execute thinly traded securities or have access to new securities launches.

RRs vs. RIAs

Registered representatives differ from 澳洲幸运5开奖号码历史查询:registered investment advisors (RIAs). Registered representatives are governed by suitability standards while registered investment advisors are governed by fiduciary standards. Registered representatives are transaction-based service providers. U.S. regulators require that registered representatives ensure an investment is suitable for an investor gi🌳ven their investment profile. They also ensur♎e that trades are executed efficiently. Investors will incur sales charges determined by securities issuers when dealing with a registered representative.

Registered investment advisors seek to offer more holistic financial plans and investing services. They offer very different fee schedules and are typically fee-based by 💞assets under management. Registered investment advisors are regulated by fiduciary standards which go beyond standard suitability. RIAs develop comprehensive financial plans and must ensure the best interest of the client.

RIAs are considered to be acting in a 澳洲幸运5开奖号码历史查询:fiduciary capacity, and so held to a higher standard of conduct 𝓡than registered representatives. This fiduciary standard mandaꩵtes that an RIA must always unconditionally put the client’s best interests ahead of their own, regardless of all other circumstances.

Identifying a Registered Representative

Investors seeking the services of a registered representative will find a range of options in the investment market. Companies like Charles Schwab offer discounts and full-service brokerage services. With Charles Schwab, for instance, an investor can place electronic trades at a discounted cost. The discount brokerage service offers a registered representative call center where a client can speak with a broker to execute trades. Charles Schwab also offers full-service brokers who work as account executives for clients and support✨ a broad range of tradinꦉg activities.

FINRA also offers a service called BrokerCheck. Through BrokerCheck an investor can research the experience and꧑ disciplinary record of brokers and brokerage firms.

Past Activities That Can Disqualify You

There are several events that could either prevent a person from becoming a registered representative, or that would result ꦚin the loss of membership or registration.

According to FINRA, you could be subject to a "statutory disqualification" under the 澳洲幸运5开奖号码历史查询:Securities Exchange Act of 1934 if you meet a number of criteria. The full, specific list of criteria ca🔥n be found on the SEC's site; a brief suꦗmmary of those criteria includes events such as:

• Certain criminal convictions (misdemeanors for 10 years, felonies permanently).
• Court injunctions related to unlawful securities activities.
• Expulsions, bars, or suspensions from SRO memberships.
• Bars or suspensions by regulatory agencies like the SEC or CFTC.
• Denials or revocations of registration by regulatory agencies.
• Findings by certain foreign entities.
• False statements in applications or reports to regulatory bodies.
• Final orders from various state and federal agencies barring association or business engagement due to fraudulent conduct.
• Findings of willful violation of securities laws or failure to supervise.
• Associations with disqualified persons, defined using Exchange Act terminology.

Note that the preceding items are a brief summary of the disclosure questions included on FINRA Form U-4. FINRA also provides a detailed summary of the statutory disqualification process.

The Bottom Line

A registered representative is a licensed financial professional authorized to buy and sell securities on behalf of clients. Their job entails providing investment advice, executing trades, and managing client portfolios.

Correction—Sep. 10, 2022: A previousꩲ version of this article misstated the requirements for the Series 7 exam.