On the surface, wealth management firms' outstanding recruiting loan balances this past year tell a familiar story.
LPL Financial's recruiting loan debt ballooned amid its
Traditional wirehouses and other big-name Wall Street wealth managers kept spending more to recruit advisors, even as many advisors continued leaving for greater autonomy at independent firms. Yet the pressure to offer advisors top compensation extended beyond Merrill, Morgan Stanley, UBS and Wells Fargo.
Firms like LPL, Raymond James and other long-perceived alternatives to Wall Street were subject to many of the same trends. Recruiting loan balances are now showing the effects.
"It's just more expensive now," said Phil Waxelbaum, the founder of the recruiting firm Masada Consulting. "So if you performed at the same level in terms of headcount and dollars of revenue in 2025 as you did in 2018, you would still have roughly a 25% increase in your loan balance."
Which firms had the biggest increases
Recruiters are quick to point out that firms' reported outstanding balances for these loans remain an imperfect gauge of firms' success at pulling in advisors. As Waxelbaum noted, the balances shed no light on how much any given firm is actually offering to attract an individual advisor or team. Firms with particularly generous offers can see their loan balance balloon, even if they're bringing in relatively few new recruits.
Yet, over the course of years, trends in loan balance sizes can become indicative of recruiting success. Firms that are consistently pulling advisors from industry rivals will generally see their numbers rise, while those that aren't many times see the opposite.
Measured by that gauge, LPL again led the pack last year. Its recruiting loan total came in at $3.68 billion in 2025. Nearly $3.3 billion of that was in the form of "forgivable" loans that advisors don't have to pay back as long as they don't leave for a set period of time. Since 2018, that forgivable number has increased by more than 1,300%.
Other independent broker-dealers likewise reported increases — although not nearly as big — over the same period. Ameriprise's balance, for instance, rose by 200% to $1.67 billion from 2018 to 2025, and Raymond James' increased by 80% to $1.67 billion.
Wirehouses present more of a mixed picture. Morgan Stanley's balance grew by 42% from $3.42 billion in 2018 to nearly $4.86 billion in 2025, while UBS' fell by 35% to just under $1.5 billion in the same period. Merrill, meanwhile, showed signs of making good on its plans to revive
The effect of more generous recruiting offers
For firms with rising numbers, the higher loan balances are almost certainly not just the result of recruiting success. More generous recruiting deals also played a role, Waxelbaum said.
As recently as seven or eight years ago, wirehouses were offering advisors upfront loans equal to around twice the revenue they had generated over the previous year. Now those loans range anywhere from 300% to upward of 400% of trailing 12-month revenue. UBS is even willing to pay more than 500% for select teams, the industry publication AdvisorHub has reported.
Independent broker-dealers, which let advisors working as independent contractors keep more of the money they generate for their firm, tend to not have to spend as much to recruit. But they also have been under pressure to increase their deals.
Gone, Waxelbaum said, are the days when firms could offer advisors a flat 100% of their previous year's revenue.
"Today they're only getting, probably, on average about 125%," he said. "But it's a 25% increase nonetheless."
Jeff Nash, the CEO and co-founder of the recruiting firm Bridgemark Strategies, said he thinks the real driver of higher recruiting payouts among independent broker-dealers hasn't been competition from wirehouses but competition among IBDs themselves. Like many industry recruiters, he thinks a recruiting loan is seldom the decisive factor in an advisor's decision to change firms.
But all else being equal between two industry rivals, why not take a large forgivable loan as an upfront payment for changing your firm affiliation?
"The reasons you wouldn't do that is if the technology, the service, the products go backwards, and you'd hurt your clients," Nash said. "But if you're just going sideways — and yes, there's some work — but you get paid one and a half or two times your revenue. And now you can use this money for your business and finance a growth spurt. That can be hugely beneficial."
Nash said he sees a lot of large independent broker-dealers simply poaching advisors from one another. Smaller firms meanwhile struggle to make the sort of offers that would bring them into consideration.
"A clear loser is the small independent BD who can't compete on deals," Nash said.
Showing discipline on recruiting deals
Some independent broker-dealers have made it a deliberate point to resist the pressure to offer the biggest recruiting loans. Raymond James CEO Paul Shoukry has repeatedly
Unlike most wealth managers, Raymond James reports how much it actually spends on advisor recruiting and retention in a given quarter. In April, the firm said it had put $111 million toward those purposes
Kirk Bell, the president of Raymond James' unit for independent contractors, said Raymond James is never going to have the biggest transition deals. "It's just not in our DNA," he said.
At the same time, he said Raymond James can't lose sight of what its competitors are willing to offer.
"It's a combination of making sure we've got enough to be competitive from a traditional transition assistance perspective but also trying to enhance our offer around the fringes to where if you need education, if you need business establishment type support, we want to be there to help out with that," Bell said.
On the wirehouse side, the best example of discipline with deals is Wells Fargo, Waxelbaum said. Its recruiting loan balance rose by only 7% to just under $2.5 billion from 2018 to 2025.
"This is numbers management," Waxelbaum said. "These numbers tell you that the leadership, the C-suite team, were extremely sensitive to not blowing up the balance sheet."
Wall Street firms still combating the lure of independence
Wirehouses have largely had to increase their deals not so much to compete with other firms' upfront recruiting payments but to
Rick Rummage, the CEO of the recruiting firm The Rummage Group, said wirehouses' real struggle seems to be less with enticing advisors to come to them and more with persuading the ones already there to stay.
"They spend all this money to attract advisors," he said. "But they don't spend the time and capital to keep them at their firm."
Rummage said the biggest complaints he hears from advisors who leave shortly after joining a firm are about broken promises.
"Or they're just not getting the follow-up that they feel they should," Rummage said. "Most of the time, you know, it's something that should have been easily fixed or corrected."
The contrasting cases of UBS and LPL Financial
Among wirehouses, UBS' struggles to
The firm has tried to replace some of those existing advisors, not just by increasing its recruiting offers but also by softening some of the compensation changes initially adopted to increase profits in its wealth management unit. UBS' loan balance — which was down 11% year over year in 2025 — suggests it still has some work to do.
Meanwhile, the largest increase in recruiting loans last year was tied directly to a particular firm's retention efforts — namely, LPL's work to hold on to Commonwealth Financial Network advisors after buying the firm in August. Last year alone, LPL's recruiting loan balance shot up by 71%.
LPL executives have acknowledged in recent earnings calls that many of their internal recruiting resources have been dedicated to retaining Commonwealth advisors. Commonwealth had a headcount of roughly 3,000 at the time of its purchase but has since
LPL's retention push has meant it has had less
"But they have been a leading recruiting entity from 2018 through 2025," Waxelbaum said. "So for LPL, a failed year is still a good year."
At the same time, LPL's loan-balance increase of more than a billion in a single year suggests it indeed has paid a heavy price for retaining Commonwealth advisors. Waxelbaum noted that LPL's purchase price for Commonwealth was $2.7 billion.
"The way I would present this is, 'Yes, our cost per acquisition was substantially higher than pure recruitment would have been, but you can't recruit 2,500 people in a calendar year,'" Waxelbaum said. "I don't care if you've got the greatest recruiting team on the history of the planet."
Competition likely to keep pushing recruiting offers higher
Waxelbaum noted that pressure to offer big recruiting deals these days is not coming just from wirehouses, regional firms and independent broker-dealers. Any number of players, including large aggregator firms using private equity financing to buy up small RIAs, are adding to the mix.
Deals — and loan balances — are only likely to keep increasing as a result.
"When we're looking at competition, would Morgan Stanley raise their offer if Merrill Lynch didn't raise theirs? Would Merrill Lynch raise their offer if UBS didn't raise theirs?" he said. "Everybody is fighting with everybody else. It's taken some, some real restraint to be intelligent about it and apply good governance."
