Recruiting Loans Drive Growth in Financial Planning Firms

Posted on September 20th, 2024 at 1:32 PM
Recruiting Loans Drive Growth in Financial Planning Firms

From the desk of Jim Eccleston at Eccleston Law

Recruiting in the financial planning industry remains a crucial strategy for growth, with major firms like LPL Financial and Morgan Stanley leading the charge by offering substantial recruiting loans to attract advisors.

According to FinancialPlanning, LPL Financial has aggressively expanded its recruiting efforts, growing its outstanding recruiting loan balance from $400 million in 2018 to over $1.4 billion in 2023. Morgan Stanley, despite its former CEO’s claim that the “recruiting game is over”, saw its balance rise to over $4.3 billion in the same period. Industry experts believe these increases are sustainable, as the loans typically pay for themselves if the advisors perform well and remain with the firm.

Revenue growth seems to correlate with high recruiting loan balances, according to industry experts. FinancialPlanning reports that LPL's revenue nearly doubled from 2018 to 2023, and Morgan Stanley saw a 52 percent increase in its wealth management revenue. However, firms that pulled back on recruiting, like Bank of America's Merrill Lynch, experienced slower growth. Merrill Lynch reduced its loan balance significantly after 2017 but recently has resumed recruiting, though its 2023 figures are not yet available.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I want to thank you for your excellent professional representation. It was greatly appreciated.

Michael M.

LATEST NEWS AND ARTICLES

January 12, 2026
Florida Man Indicted in $36 Million Investment Fraud Scheme

According to news sources, federal prosecutors allege that a Florida man orchestrated a multimillion-dollar Ponzi scheme that funded a luxury lifestyle built on stolen investor money, according to the U.S. Department of Justice.

January 9, 2026
FINRA Sanctions Former Wells Fargo Advisor for Profile Falsification and Unauthorized Trading

The Financial Industry Regulatory Authority (FINRA) disciplined former Wells Fargo Advisors broker James E. Holmes III for misconduct tied to his falsifying customer information and unauthorized trading.

January 8, 2026
Georgia Investment Advisor Pleads Guilty to Ponzi Scheme

A former Georgia investment adviser has pleaded guilty to wire fraud after federal prosecutors accused his firm of operating a multiyear Ponzi scheme that cost investors millions of dollars, as reported by Financial Advisor News.