Securities, Commodity Contracts, & Other Financial Investments & Related Activities

NAICS 523 covers broker-dealers, investment advisers, commodity trading advisors, and the exchanges and clearinghouses that facilitate securities and derivatives markets. The subsector's largest firms — Charles Schwab, Fidelity Investments, Morgan Stanley, and Goldman Sachs — operate across brokerage, asset management, and prime brokerage, while thousands of independent registered investment advisers (RIAs) manage portfolios for high-net-worth and institutional clients.

Revenue models split along regulatory lines. Broker-dealers registered with FINRA earn commissions, market-making spreads, and margin-lending interest. Registered investment advisers supervised by the SEC (or state regulators for firms below $100 million AUM) charge asset-based fees typically ranging from 25 to 100 basis points. Commodity pool operators and futures commission merchants regulated by the CFTC collect clearing fees and performance allocations. The SEC's Regulation Best Interest (Reg BI), effective since June 2020, imposes a higher care standard on broker-dealers when recommending securities to retail customers, narrowing the gap between broker and adviser obligations.

New York City and Connecticut's Fairfield County remain the employment and AUM center of gravity, but RIA registrations have grown fastest in Texas, Florida, and Colorado as advisers relocate or launch firms in lower-tax jurisdictions. The subsector's structural shift toward fee-based advisory and passive indexing continues: Morningstar reported that US passive fund assets surpassed active fund assets for the first time in late 2023, compressing fee revenue for traditional stock-picking shops and driving consolidation among mid-size asset managers.