United States Senator Bill Hagerty raised concerns on Mar. 31 about the Financial Industry Regulatory Authority’s (FINRA) recent decision to increase member firm fees by $450 million through 2029, a move approved by the Securities and Exchange Commission in January 2025.
The issue matters because it affects the financial obligations of broker-dealers regulated by FINRA, and raises questions about transparency and accountability within self-regulatory organizations overseeing U.S. securities markets.
“We write to express our concerns regarding the Financial Industry Regulatory Authority’s (FINRA) decision to increase member firm fees by $450 million, or about five percent on a compounded annual basis, through 2029 (the ‘Fee Increase’), which was approved by the Securities and Exchange Commission (SEC) in January 2025,” Hagerty wrote. “The Fee Increase comes just three years after FINRA increased fees by $225 million starting in 2022.”
Hagerty said that these fee increases come at a time when the brokerage industry is shrinking. He noted that from 2006 through 2023, the number of FINRA registered broker-dealers declined from over five thousand to just under thirty-three hundred—a drop of thirty-four percent—and that registered representatives also fell nearly two percent since their peak in 2015. Meanwhile, he pointed out that SEC-registered investment advisers reached a record high during this period.
He further questioned whether another fee hike is necessary given what he described as “outsized and increasing compensation costs” at FINRA. According to Hagerty’s letter, average employee compensation rose almost five percent between 2022 and 2023, with total compensation expenses making up sixty-two percent of FINRA’s costs last year.
Hagerty also suggested that FINRA should have explored additional cost-cutting measures before seeking higher fees from its members. He referenced various internal programs—such as diversity initiatives and professional development partnerships—as potential areas for review.
Hagerty serves on Senate committees including Appropriations; Banking, Housing and Urban Affairs; Foreign Relations; and Rules and Administration according to his official website. He has been elected as U.S. Senator from Tennessee according to his official website, hails from Sumner County where he achieved Eagle Scout rank according to his official website, maintains offices across Tennessee including Memphis, Nashville, Chattanooga, Knoxville, Jackson, Tri-Cities area according to his official website, engages in community service with civic organizations according to his official website, ran on a platform emphasizing national security and economic development while bringing experience as former U.S. Ambassador to Japan as noted on his official website.
In closing his letter addressed directly to Mr. Cook at FINRA, Hagerty requested answers regarding these issues no later than May 1.