Tr?id=566623520170033&ev=PageView&noscript=1

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
Quotes Bigger

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

Michael M.

LATEST NEWS AND ARTICLES

1773851287 Law
March 18, 2026
LPL and Ameriprise Notify Clients of Cybersecurity Incidents Involving Account Access

LPL Financial and Ameriprise Financial Services recently notified certain clients about separate cybersecurity incidents that exposed private information and, in one case, led to unauthorized trading activity.

1773760408 Law
March 17, 2026
Bankruptcy Court Orders Emerson Equity to Produce Records in Inspired Healthcare Case

A federal bankruptcy court in Fort Worth has ordered Emerson Equity to produce documents connected to the sale of private securities issued by Inspired Healthcare Capital, according to InvestmentNews.

1773678753 Law
March 16, 2026
Concorde Investment Services Faces Scrutiny Over Sales of Inspired Healthcare Private Investments

Concorde Investment Services is facing increased scrutiny following the bankruptcy of Inspired Healthcare Capital, whose private investment offerings were widely sold through independent broker dealers, according to InvestmentNews.