The Three Communication Categories
Quick Answer
The FINRA communications-with-the-public framework sorts every piece of broker-dealer communication into three categories using a 25-investor / 30-day test. Institutional communications go only to institutional investors. Retail communications reach more than 25 retail investors within any 30 calendar-day period. Correspondence reaches 25 or fewer retail investors in 30 days. The category drives every downstream rule: principal approval, FINRA filing, supervisory review, and recordkeeping.
The communications-with-the-public framework is the classification engine for the entire communications regime. Once a piece of marketing material is classified, the rest of the rule (approval, filing, content standards, retention) follows mechanically. Misclassification is the most common Series 24 trap because the same content can be a different category at a different firm depending on who receives it and how widely it is distributed.
The Three Communication Categories
| Category | Definition | Audience |
|---|---|---|
| Institutional Communication | Any written (including electronic) communication distributed or made available only to institutional investors | Institutional investors only; excludes the firm's internal communications |
| Retail Communication | Any written (including electronic) communication distributed or made available to more than 25 retail investors within any 30 calendar-day period | Includes any non-institutional audience |
| Correspondence | Any written (including electronic) communication distributed or made available to 25 or fewer retail investors within any 30 calendar-day period | Smaller-scale; lower regulatory burden |
Think of it this way: The 25-and-30 test is a counting rule. Count the retail investors you are reaching with this content. If the answer is zero (only institutional), it is institutional. If 1 to 25, correspondence. If 26 or more, retail. The counting window is rolling 30 days.
Exam Tip: Gotchas
- The threshold is strictly more than 25. 26 retail investors in 30 days = retail communication. 25 retail investors in 30 days = correspondence. The exam will hand you a fact pattern with exactly 25 retail recipients to test whether you know the cliff edge.
- The same content can be different categories at different firms. A draft sales piece sent to 200 retail clients is retail at Firm A; the identical piece sent to 18 retail clients is correspondence at Firm B. Classification is audience-based, not content-based.
Defining an Institutional Investor
The communications-with-the-public framework lists the categories of investors who count as institutional:
- A bank, savings and loan, insurance company, or registered investment company
- An investment adviser registered with the SEC or with a state
- A government entity (federal, state, local) or a subdivision of one
- An employee benefit plan with at least 100 participants, or a qualified plan of a member firm
- A person (natural or non-natural) with total assets of at least $50 million
- A FINRA member firm or a registered person of a FINRA member
- Any other person acting solely on behalf of an institutional investor
Anyone not on this list is, by default, a retail investor for the communications-with-the-public framework purposes.
Exam Tip: Gotchas
- The $50 million threshold counts total assets, not net worth or income. A high-net-worth individual with a $5 million net worth is still a retail investor. A trust with $60 million in total assets is institutional even if the underlying beneficiaries are retail clients.
- An employee benefit plan needs 100 participants to be institutional. A 95-participant pension plan is retail under the framework, even if the plan's assets are large.
How Audience Mix Drives Category
The only to institutional language in the institutional definition is unforgiving. Any retail recipient flips the category.
- An email blast sent to 500 institutional clients plus 1 retail investor is a retail communication, not institutional
- A LinkedIn post that is publicly visible (any retail investor could read it) is a retail communication
- An email forwarded by an institutional client to a retail acquaintance does not retroactively reclassify the original send, but if the firm anticipated the forward, classification is reviewed under the firm's intent
Think of it this way: Institutional is a clean room. The moment one retail person walks in, it becomes a retail venue. The 25-and-30 test then asks how many retail people are in the room.
Exam Tip: Gotchas
- A single retail recipient destroys institutional status. The exam will describe a blast to 50 institutional clients and one accidental retail copy and ask the category. The answer is retail communication, with full retail approval and filing rules.
- Internal communications are excluded from the institutional definition entirely. A memo to a firm's own associated persons is not a covered communication at all (although it remains subject to general supervisory review under the supervisory system requirement).
Public Appearances vs Written Communications
The communications-with-the-public framework handles public appearances as a separate, parallel track. A public appearance is a participation in a seminar, forum (including an electronic forum), radio or television interview, or other public-speaking event. Public appearances are not classified as written communications and do not count toward the 25-and-30 test, but they remain subject to the framework's content standards.
| Communication Type | Counted in 25/30 Test? | Approval Trigger | Filing Trigger |
|---|---|---|---|
| Written retail communication | Yes | Pre-use principal approval | Per the framework's filing rules |
| Written correspondence | Yes | Supervisory review per WSPs | None |
| Written institutional | No (institutional only) | Supervisory review per WSPs | None |
| Public appearance | No | Not pre-approved per piece | None |
All four categories remain subject to the same content standards (fair, balanced, suitable basis, disclose interests).
Exam Tip: Gotchas
- A public appearance is governed by the content standards, not the approval workflow. A registered representative speaking at a free seminar does not need pre-use principal approval of the speech, but every recommendation must satisfy the content standards (fair, balanced, suitable basis, disclose interests).
- A webinar that is recorded and posted online becomes a written communication for replay purposes. The live event is a public appearance; the archived recording, if distributed to more than 25 retail investors in 30 days, is a retail communication requiring pre-use approval and full content review.
Classification Drives Approval, Filing, and Recordkeeping
Every other section of the communications-with-the-public framework keys off the category:
- Approval: retail = pre-use principal approval; institutional and correspondence = supervisory review per WSPs
- Filing: institutional and correspondence are never filed; some retail communications must be filed pre-use, others post-use, and many are excluded
- Recordkeeping: every category is retained for 3 years, with the most recent 2 years easily accessible, but the records differ (principal approver for retail, reviewer for correspondence and institutional)
A firm that misclassifies a piece as correspondence when it should have been retail will fail every downstream control: no pre-use approval, no FINRA filing, weaker recordkeeping. Classification is the single most consequential decision in this rule.
Exam Tip: Gotchas
- Classification is the gateway, not the destination. The exam will sometimes give you a fact pattern that gets the classification right but applies the wrong approval or filing rule. Work the chain: category first, then approval, then filing.