The total number of broker-dealers registered with the Financial Industry Regulatory Authority dropped to 3,607 in 2018 from 4,067 in 2014, with FINRA losing 119 firms from 2017 to 2018, according to FINRA’s just-released second annual statistical report.

Firms that are broker-dealer only and regulated by FINRA stand at 334,860, while the number of dual BDs that are also investment advisor reps and also overseen by the states total 294,684.

Brad Bennett, former head of FINRA enforcement, told ThinkAdvisor Wednesday that the report “is further evidence of the decline of the broker-dealer model and highlights the challenge FINRA faces as the result of the decline of securities industry activity within its current jurisdiction.”

Also, Bennett added, “the major firms’ decision to exit the broker transfer protocol agreement appears to have significantly reduced the movement of brokers between firms.”

Five states hold the vast majority of firms — California (998), Connecticut (405), Florida (696), Illinois (643) and New York (1,596).

The second annual report offers a snapshot of the brokerage firms, registered reps and market activity that FINRA regulates.

“The snapshot is designed to provide visibility into the broad range of firms, individuals and trading activity that FINRA oversees,” said FINRA Chief Economist Jonathan Sokobin in a statement.

The total number of FINRA registered reps spiked in 2015, jumping to 639,457 from 636,192 in 2014.

But the number has seen a consistent drop-off since then, falling to 629,544 in 2018 from 630,273 in 2017.

— Check out Number of BDs, Reps Drops for Second Straight Year, New FINRA Report Says on ThinkAdvisor.