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

December 19, 2025
Industry Groups Press Senate at Advance Financial Exploitation Prevention Act

Several industry associations are urging the U.S. Senate to pass the Financial Exploitation Prevention Act, legislation that would allow mutual fund companies and their transfer agents to delay redemptions when they reasonably suspect elder financial abuse.

December 18, 2025
UBS Warns of Rising Default Risk in Private Credit

A UBS report signals that credit stress likely will intensify next year as borrowers confront inflation, elevated interest costs, and softening consumer conditions.

December 17, 2025
Audit Failures, Whistleblower Claims, and Renewed Scrutiny of the Big Four

A series of lawsuits, congressional findings, and high-profile corporate collapses has reignited long-standing concerns about the audit industry’s ability to confront fraud, as reported by Bloomberg Law.