A newly approved FINRA rule could result in more hiring within the industry.

The SEC has approved FINRA’s proposal to streamline competency exams, eliminating past redundancies and offering greater opportunity for new and returning advisors.

The changes will go into effect on Oct. 1, 2018, and advisors just getting into the industry and firms looking to bring in new advisors will feel the impact.

“This could be great news,” Matt Ransom, director of Raymond James PCG Education & Practice Management, says. “FINRA has recognized that the industry is in dire need of new talent in order to continue the important work advisors do for their clients.”

The rule changes will restructure the representative-level qualification exams and amend the continuing education requirements. As part of the streamlined structure, all applicants at the representative level will be required to pass a general knowledge exam, the Securities Industry Essentials, and an updated representative-level qualification test.

The new plan eliminates duplicate testing of general securities knowledge on representative-level examinations and eliminates several representative-level registration categories that have become outdated or have limited use, according to FINRA.

“Hopefully this change will remove the hesitation that some firms may have shown in recruiting new talent, knowing they must pay trainees to spend the first few months studying,” Ransom adds. “It will also allow these potential and future financial advisors to test their knowledge to see if this career is really something they want to pursue and can be successful doing, which in turn should lead to more confident and competent new hires—benefitting us all.”

The changes follow FINRA President and CEO Robert Cook’s FINRA360 initiative, a plan designed to help the regulator self-evaluate and make improvements within the organization, which was announced earlier this year.

“This is an important change built upon the need to streamline the examination process and eliminate redundancies in qualification and registration requirements," Cook says in a statement. "The new structure brings greater consistency and uniformity to the process for entering and returning to the brokerage industry.”

SIFMA was one proponent of FINRA’s proposed changes to the registration rules, having previously filed a comment letter stating the changes would bring in “significant” improvements to the registration and examination rules.

“SIFMA has been very supportive of this effort for years. We think this is a very positive development that will streamline the registration process and provide firms with flexibility and cost savings,” Kevin Zambrowicz, managing director and associate general counsel at SIFMA says.

Amanda Schiavo

Amanda Schiavo is an associate editor for Financial Planning. Follow her on Twitter at @SchiavoAmanda.