What is a 'Registered Representative - RR'

A registered representative (RR) is a person who works for a brokerage company and serves as a representative for clients trading investment products such as stocks, bonds and mutual funds. Registered representatives are also known as brokers.

BREAKING DOWN 'Registered Representative - RR'

Registered 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 the Financial Industry Regulatory Authority (FINRA).

To become licensed as a registered representative for a sponsoring firm, a person must pass the Series 7 and 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 and some variable contracts for their clients. 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.

Standards for Registered Representatives

Investors seek registered representatives to carry out financial market transactions on their behalf. Registered representatives typically have access to a full range of market trading capabilities which fit the needs of their investors. They may also be able to execute thinly traded securities or have access to new securities launches.

Registered representatives differ from registered investment advisors. 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 given their investment profile. They also ensure 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. Registered investment advisors develop comprehensive financial plans and must ensure the best interest of the client.

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 discount and full-service brokerage services. With Charles Schwab 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 that work as account executives for clients and support a broad range of trading activities. (See also: Picking Your First Broker.)

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

RELATED TERMS
  1. Advisor

    An advisor can be any person or company involved with advising ...
  2. Shareholder Register

    A shareholder register is a list of active owners of a company's ...
  3. Series 7

    The Series 7 is an exam and license that entitles the holder ...
  4. Registered Principal

    A registered principal is a licensed securities dealer who is ...
  5. Investment Advisor

    An investment advisor is any person or group that makes investment ...
  6. Series 82

    The Series 82 is a certification giving financial professionals ...
Related Articles
  1. Financial Advisor

    Breaking Down Financial Securities Licenses

    Find out which exam you need to begin your career as an investment professional.
  2. Financial Advisor

    Introduction to the Series 65 exam

    The Series 65 is required in many states in order to be a fee-based advisor. Find out what it is and whether you need it.
  3. Financial Advisor

    Becoming A Registered Investment Advisor

    To become a registered investment advisor requires specific licensing, qualifications and regulations, but the greater freedom may be worth it.
  4. Financial Advisor

    Should you add a securities license to your qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.
  5. Tech

    Advisors Fees: What Are You Paying For?

    Fees or commissions? Which is best? Either way, what matters most is that the investor is aware of each charge and how if impacts their portfolio.
  6. Financial Advisor

    Series 63, Series 65 Or Series 66?

    When joining the world of investment professionals, you must take the right exams.
  7. Personal Finance

    How Fiduciary and Suitability Standards Differ

    There are big differences between how advisors and brokers qualify investments for clients.
  8. Financial Advisor

    Essential Questions for a Financial Advisor

    If you're a prospective financial advisor client (or an adviser), here are some questions you should ask ... and be prepared to answer.
  9. Financial Advisor

    Career Advice: Stockbroker Vs. Financial Advisor

    Read a detailed comparison between life as a stockbroker versus a financial advisor; find out how the two are different and which one is best for you.
  10. Personal Finance

    How to Evaluate Financial Advisors Via BrokerCheck

    Many people research restaurants or movies, but few select brokers or financial advisors with much due diligence. Here's how BrokerCheck can help.
RELATED FAQS
  1. The FINRA Series 6 and Series 7 exams: The differences

    Learn about the regulatory exams needed to become a registered representative and the main differences between the Financial ... Read Answer >>
Hot Definitions
  1. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  2. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  3. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  4. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  5. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  6. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Trading Center