As Merrill guns recruiting, Morgan Stanley sees assets overtake headcount

Even as Bank of America's CEO reconfirmed his commitment to recruiting, a Morgan Stanley executive noted his firm has added trillions in clients assets without a proportionate increase in advisors.

In discussions this week at Barclays 24th Annual Global Financial Services Conference in New York, both BofA CEO Brian Moynihan and Morgan Stanley Co-president Dan Simkowitz laid out seemingly differing perspectives on how necessary influxes of new advisors are to their firms' wealth management businesses. Speaking on Monday, Moynihan said the prospect for growth at Merrill and other subsidiaries in BofA's Global Wealth and Investment Management division "really comes down to a little more recruiting, so the advisor population grows."

By contrast, Simkowitz noted on Tuesday that Morgan Stanley has managed to have $8 trillion in client assets in its wealth management business yet "the advisor count is not growing anywhere near those levels."

READ MORE: With deal costs up, could AI make recruiting a bad bet? 

What recruiting balances say about Morgan Stanley, Merrill

Both comments reflected the two firms' historically differing approaches to recruiting along with predictions that AI could eventually help relieve firms from some of the need to bring in new talent. Morgan Stanley has long been one of the most aggressive recruiters in the industry. It ended 2025 with $4.86 billion in recruiting balances, by far the largest total for the forgivable loans offered to advisors in return for moving over from a rival firm.

Bank of America's Merrill, by contrast, has only begun to revive its recruiting ambitions after letting them lay fallow for several years. That return to recruiting was also reflected in Merrill's recruiting balance for 2025, which was up nearly 50% year over year to $374.5 million.  

In temporarily backing away from recruiting years ago, Moynihan had questioned whether transition deals offered to incoming advisors were becoming too expensive. Moynihan on Monday confirmed that recruiting remains costly.

"We're recruiting again, and we stayed out of recruiting — the deals got crazy and everything — but we're recruiting exactly who we want in the 600 offices we have and the 97 markets we have," he said. Moynihan praised the two co-heads of Merrill Wealth Management, Lindsay Hans and Eric Schimpf, saying "they're doing a good job."

Merrill's recent recruiting deals include an advisor duo that had been managing $1.2 billion for UBS in Santa Fe, New Mexico.

Meanwhile, the word "recruiting" didn't come up once in Simkowitz's talk on Tuesday. Morgan Stanley has long been among the leading wealth managers talking about how AI will let advisors take on more clients by automating routine tasks. Although almost no one foresees AI replacing advisors, many think it will relieve firms from pressure to add to their headcounts even as they add to their client and asset totals.

"We've got a lot of processing at Morgan Stanley, and some of it bleeds into research about operations, accounting, legal, software development, all of that is going to create a system which we're already seeing, which is the revenue per employee at Morgan Stanley -- the [return on investment] is pretty dramatic," Simkowitz said.

Neither Merrill nor Morgan Stanley reports its advisor headcount anymore.

READ MORE: How debt and recruiting risks threaten big RIAs 

Industry recruiters see no slowdown in competition for headcount

Rick Rummage, the CEO of the recruiting firm The Rummage Group, said Merrill and Morgan Stanely are both among the most aggressive recruiters in the industry. Like many large wealth managers these days, they often offer advisors who change firms deals equal to as much as 400%, or even 500%, of their previous year's revenue production.

If they've become more selective in any way, it's in favoring advisors who produce the majority of their revenue from recurring asset-management fees rather than commissions and other charges stemming from one-off transactions. The wealth management industry has generally come to prize asset fees as a way to generate steady income in all types of economic circumstances.

"As far as recruiting from Merrill Lynch and Morgan Stanley, they're both pretty aggressive," Rummage said. "The recruiting wars have hit an all-time high. I don't know if they'll go any higher, but they're still extremely competitive."

Jason Diamond, the president of the recruiting firm Diamond Consultants, agreed that both Merrill and Morgan Stanley remain aggressive recruiters while they may have become more selective in favoring advisors and teams producing at least $1 million in annual revenue. He said the little attention Morgan Stanley draws to its recruiting shouldn't be taken as a sign of waning interest.

"It's frankly the position that the category leader you would expect them to take, which is: We're the biggest, we're the best at this. We will still recruit selectively," Diamond said.

READ MORE: Should advisors work with a recruiter or go it alone? 

How AI could relieve pressures to recruit

Like Simkowitz, Moynihan on Monday vaunted AI's ability to boost advisors' productivity, while making the common prediction that human beings will have a place in the industry. Among of their various applications of AI, Merrill and Bank of America's private bank have given advisors an AI system that works with Salesforce customer relationship management software and Zoom meeting software to help them prepare for meetings, provide summaries of client discussions and plan their next steps.

"This will have a big impact," Moynihan said Tuesday. "It's just got to be done, carefully crafted. But we still believe a human is the most important advisor we've got."

Moynihan's comments on AI came amid widespread anxieties that the technology is advancing beyond human beings' ability to control it. Such fears are doing seemingly nothing to slow wealth managers' embrace of AI.

On Monday, the AI giant Anthropic announced Claude for Financial Advisors, offering it initially to the 16,000 RIAs that now work with Charles Schwab through its Schwab Advisor Services division. Schwab Advisor Services is a custodian that safeguards client assets and offers various other types of support. 

Also on Monday, the RIA-support network Dynasty Financial Partners announced it is adding Claude AI to its Dynasty Desktop system for advisors. Advisors will be able to ask the system any question about a client, account or document, receive an answer and then turn the results into a proposal, report or paperwork, according to a Dynasty press release.