LPL leads surge in forgivable recruiting loans in 2025

Wealth management firms reported larger balances of forgivable recruiting loans in 2025, with LPL Financial showing the largest outstanding total at $3.68 billion. Nearly $3.3 billion of LPL’s balance consisted of loans that can be forgiven if advisors remain at the firm for a set vesting period.

Firms report these upfront payments as debt in Securities and Exchange Commission filings. Recruiting loans are paid to advisors or teams who join from rivals and are typically forgiven if the advisor stays for seven to 12 years. Outstanding balances do not disclose individual offer sizes, but multi-year changes show which firms have been active in hiring and how deal levels have shifted since 2018.

LPL’s forgivable-loan total rose more than 1,300% from 2018 to 2025 and jumped 71% in 2025 as the firm focused on retaining advisors after acquiring Commonwealth Financial Network for $2.7 billion. Commonwealth had about 3,000 advisors at the time of the purchase; LPL reported retention efforts after the acquisition as a driver of higher short-term recruiting costs.

Other firms’ balances in 2025 included Morgan Stanley at about $4.86 billion, up 42% from 2018; UBS at just under $1.5 billion, down about 35% since 2018; Ameriprise at $1.67 billion, up roughly 200%; Raymond James at $1.67 billion, up roughly 80%; Merrill at $374.5 million, up nearly 50% in 2025 though still below its 2018 level; and Wells Fargo at just under $2.5 billion, up about 7% since 2018.

Recruiting specialists identified two main factors behind larger loan balances: more hiring activity and bigger per-advisor payouts. Phil Waxelbaum, founder of Masada Consulting, stated, “It’s just more expensive now,” and estimated that a firm matching its 2018 headcount and revenue in 2025 would still report roughly a 25% higher recruiting-loan balance because of larger offers. He noted that wirehouses that once offered upfront loans equal to about twice an advisor’s prior-year revenue now commonly offer 300% to 400% of trailing revenue for many teams, with some offers above 500% for select groups.

Independent broker-dealers have raised their offers as well, though they historically paid smaller upfront sums because advisors retain a larger share of fees as independent contractors. Jeff Nash, chief executive of Bridgemark Strategies, observed that a large forgivable check rarely alone determines an advisor’s move, and that technology, service and product access influence whether an advisor will switch firms. “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,” Nash said, noting advisors can use the proceeds to grow their practices.

Some firms have sought to limit payout size. Raymond James reports recruiting and retention spending and disclosed $111 million in such costs in the first quarter of 2025; the firm said those funds supported advisors who brought about $21 billion in client assets from prior firms and generated roughly $141 million in annual revenue. Kirk Bell, president of Raymond James’ independent contractor unit, stated the firm does not aim to make the largest transition payouts.

Recruiters also pointed to competition from a range of buyers, including private-equity-backed aggregators buying small RIAs, as a factor raising bid levels. Phil Waxelbaum asked rhetorically whether one firm would raise offers only if rivals did the same, describing a competitive environment in which many firms push offer levels upward.

Firms’ SEC disclosures show rising outstanding balances across multiple channels in 2025 and detailed hiring and retention activity tied to acquisition-related costs and increased per-advisor payouts. Recruiters continue to report active competition for advisors and higher reported recruiting liabilities in firm filings.