Retail communication
A retail communication is any written or electronic message from a broker-dealer distributed to more than 25 retail investors within a 30-calendar-day period. Under FINRA Rule 2210, it generally requires principal approval before use.
Retail communication is one of three categories FINRA Rule 2210 uses to classify a member firm's written and electronic communications. A message counts as retail communication when it is distributed or made available to more than 25 retail investors within any 30-calendar-day period. Advertisements, websites, social media posts, sales brochures, form letters, and seminar slides typically all qualify.
The other two categories are defined by audience and count. Correspondence is a written message sent to 25 or fewer retail investors within 30 calendar days — the classic example is an individual email or letter to a client. Institutional communication goes exclusively to institutional investors such as banks, insurance companies, registered investment companies, and other broker-dealers. The category a message falls into determines how strictly it is supervised.
Because retail communications reach a wide public audience, they carry the heaviest requirements: a registered principal must generally approve each retail communication before first use, and firms must retain communications in their books and records. Certain items — like new firms' retail communications or pieces concerning investment companies — may also need to be filed with FINRA. All communications, regardless of category, must be fair, balanced, and not misleading.
The distinctions between retail communication, correspondence, and institutional communication are a staple of the Series 6, Series 7, and Series 9 exams. Test writers love edge cases: memorize the more-than-25-retail-investors trigger, the 30-day window, and which categories demand prior principal approval.
Key takeaways
- Retail communication reaches more than 25 retail investors within a 30-calendar-day window.
- Correspondence goes to 25 or fewer retail investors in that window; institutional communication goes only to institutional investors.
- Retail communications generally require prior approval by a registered principal and must be retained in firm records.
- All FINRA member communications must be fair, balanced, and free of misleading claims.
- The 25-investor threshold and 30-day window are among the most commonly tested numbers on the Series 6, 7, and 9.