DFPI BDIA Examinations Continue To Decline

The California Department of Financial Protection & Innovation's Broker-Dealer/Investment Adviser (BDIA) program licenses and regulates investment advisers, investment adviser representatives, broker-dealers, and broker-dealer agents.   Over the last three fiscal years,1 the number of investment advisers (IAs) licensed by the DFPI has remained relatively flat.  According to this report, in the 2018-2019 fiscal year, the DFPI had 3,729 licensed IAs.  In the most recently completed fiscal year (2020-2021), the DFPI had 3,734 licensed IAs.  During the last three fiscal years, the number of broker-dealers (BDs) declined approximately 3.6% from 2,674 to 2,578.  

While the numbers of licensed IAs and BDs has not changed significantly, the DFPI has completed far fewer examinations.  In the 2018-2019 fiscal year, the DFPI completed a total of 1,066 examinations (including 598 by questionnaire).  In 2020-2021, the number of completed examinations declined 49% to 546 (including 183 by questionnaire).  This trend is illustrated by the following graph (no out-of-state BDs were examined in the last three fiscal years):

1The DFPI's fiscal year ends on June 30.