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 learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.

LATEST NEWS AND ARTICLES

December 4, 2025
Webull Faces Scrutiny After Alleged Account Breach and Penny Stock Manipulation

An emerging investigation into Webull Financial centers on allegations that an unauthorized third party infiltrated the firm’s security systems, accessed customer brokerage accounts, liquidated existing holdings, and used the proceeds to purchase shares of Ten-League International Holdings Ltd.

December 3, 2025
FINRA Sanctions Former Morgan Stanley Broker Over Unauthorized Transfers

A longtime Morgan Stanley financial advisor agreed to a $5,000 fine and a two-month suspension after FINRA found that he executed multiple transfers from his former spouse’s retirement account without proper authorization, as reported by AdvisorHub.

December 2, 2025
Crypto's Leverage Shakeout Exposes Structural Risks

The crypto market’s recent downturn erased nearly $20 billion in leveraged positions within hours and half a trillion dollars in market value over a single weekend.