FINOP

All registered broker dealers who introduce customers are required to employ a Financial & Operations Principal (FINOP).  Much like how the CPA license serves as a qualification for public accountants, the Series 27/28 examinations serve as evidence that a Financial & Operations Principal has been sufficiently educated about broker dealer accounting and has passed the designated NASD examination required to represent a broker dealer firm in a financial capacity.  FINRA has modified the Series 27/28 exam over the past half decade to limit the number of licensed professionals and to ensure that only highly qualified candidates serve as CFO of broker dealer firms.

While investment advisors have not yet been required to employ a Financial & Operations Principal, there have been discussions within the United States Congress that would require all 25,000 investment advisory firms to require a licensed Financial & Operations Principal as well.  This would increase the value of the FINOP capacity, as the number of firms required to have a FINOP would automatically increase fivefold without any newly licensed professionals becoming readily available.

While some firms have the financial resources to employ a full-time FINOP, most small broker dealers cannot incur the cost of hiring a licensed professional in-house.  FINRA understands the financial burden it may place on financial services firms to employ a full-time licensed FINOP and has subsequently permitted small broker dealers to outsource the FINOP function to qualified third party candidates.  Many ACI professionals have passed the Series 27/28 examination and currently act in this capacity for existing clients.