At Cetera, CEO Durbin says that recruiting advisors is strong but remains expensive: Analyst

Cetera Financial Group in 2025 paid top dollar to recruit financial advisors, a response to the scrum created when rival LPL Financial Holdings Inc. said at the end of March last year it was buying Commonwealth Financial Network, whose advisors were among the most productive in terms of annual revenue in the industry.

That move to boost transition assistance packages – or recruiting bonuses – to attract advisors from Commonwealth and other firms has appeared to pay off for Cetera Financial Group, which works with 12,000 advisors and $630 billion in client assets.

Cetera’s CEO Mike Durbin stressed Cetera’s recent success in the financial advisor market during a fireside chat with analyst Jeff Schmitt of William Blair.

Cetera “indicated that recruiting activity has reached record levels in recent years, with 2026 on pace to set another record,” according to a research note released Monday by Schmitt, although he did not cite specific figures.

Cetera is a privately held broker-dealer and registered investment advisor network owned by private investor Genstar.

Cetera is far from the only firm faced with increasing expenses for hiring financial advisors.

“Over the last 10 to 15 years, the cost of recruiting financial advisors has probably tripled the dollar size of the transition assistance deals,” said Jeff Nash, an industry recruiter, speaking generally about expenses associated with hiring financial advisors. “Right now, it’s a premium for growth. The big firms are paying up for advisors to grow and then increase earnings.”

A spokesperson for Cetera on Tuesday did not return a call to comment.

For years, the independent broker-dealer industry, think LPL, Cetera and Osaic, paid recruits in one way, based on a small percentage, 20 basis points or 0.2%, for example, of an advisor’s previous years fees and commissions, called trailing 12 in the industry.

The independent broker-dealer industry left huge recruiting payments up to the wirehouses, where advisors work as employees and not independent contractors.

That changed in 2018 when LPL Financial, near the time its current CEO and former head of recruiting Rich Steinmeier joined the firm, started paying some recruiting bonuses based on advisors’ assets and not their trailing 12. That was potentially far more lucrative than the traditional recruiting deal structure. 

InvestmentNews reported last year, a few months after LPL said it was buying Commonwealth, that Cetera was offering to pay some advisors as much as 150 basis points, or 1.5%, based on their assets, if 60% or more are in advisory accounts.

That means if an advisor manages $1 billion in client assets, the Cetera recruiting bonus would total $15 million and be worked off over nine to 10 years as a forgivable loan.

Schmitt’s note on his chat with Durbin did not include such details but acknowledged larger recruiting deals for advisors.

“Transition assistance – TA - rates have trended upward for several years, with the pace accelerating in March 2025 following LPL’s announced acquisition of Commonwealth as competing firms sought to capitalize on the advisor movements,” according to Schmitt’s note. “Since then, TA rates have continued to move higher, although in a stair-step fashion, with periods of stability followed by incremental increases when a firm breaks from the group and offers more attractive terms.”