Advisor recruiting will be wild!

2025 was a real donnybrook in the competition between large broker-dealers to land top-tier financial advisor recruits, and by many accounts 2026 – the Year of the Fire Horse in the Chinese calendar – will turn out the same.

Last year’s catalyst was LPL Financial Holdings Inc.’s announcement, at the end of March, that it was buying rival Commonwealth Financial Network for $2.7 billion in cash. Broker-dealers and registered investment advisors immediately piled on, cold-calling Commonwealth’s close to 3,000 advisors so often that some took to social media and asked recruiters to stop bothering them.

Executives at Commonwealth Financial − which for decades presented itself as a boutique with top-shelf service in contrast to LPL Financial, the industry’s behemoth with more than 10 times the number of financial advisors − built a firm that was home to some of the largest-producing advisors in the financial advice business. That success, combined with their esprit de corps, makes them highly valuable.

Even though LPL Financial has closed the Commonwealth Financial transaction, it still needs to move the advisors onto its platform, giving recruiters plenty of opportunity to pitch them to leave and join a different firm.

Meanwhile, industry consolidation is continuing, and some senior industry executives believe that another large deal for a brokerage firm would create a catalyst for a recruiting frenzy similar to the one created by the Commonwealth acquisition.

“It’s a competitive environment right now,” said LPL Financial’s CEO Rich Steinmeier, answering an analyst’s question about attracting financial advisors during a conference call last month. “Competitors remain aggressive.” And aggression in the brokerage business means money − specifically, bonuses referred to in the industry as “transition assistance,” paid to advisors when they move from one firm to another.

“We’ve seen TA levels spike up, most notably right after the Commonwealth announcement,” Steinmeier said.

“Recruiting reached a new intensity in 2025 − arguably the most competitive landscape I’ve seen − and I expect this trend to continue through 2026,” said Jeff Buchheister, chief financial officer of Cetera Financial Group, in a recent research note from William Blair.

“Significant M&A activity across the industry created disruption, which opened the door for firms like Cetera,” Buchheister said. “We capitalized on these opportunities, successfully attracting a substantial number of advisors and teams following these disruption events.”

Triggered in large part by the sale of Commonwealth Financial and by a stock market that just wouldn’t quit and rose 17.9 percent last year, 2025 was a tumultuous year for financial advisors jumping from one firm to another, looking for better compensation and service at a new home. 

Recruiting financial advisors, particularly in such a highly competitive market, is not cheap. Bonuses, or the aforementioned transition assistance, are more dear than ever.

And large firms appear to be adjusting to those higher operating costs.

Raymond James Financial, in a first, broke out recruiting expenses for the last quarter of 2025 in its January earnings report. It reported “recruiting-and retention-related compensation” of $107 million for the three months ending December 31, an increase of 22 percent compared to the same quarter last year.

The firm, a recruiting powerhouse, was highly focused last year on Commonwealth Financial advisors; industry sources told InvestmentNews that the firm finished second to LPL in the bidding for the privately-held Commonwealth.

“There’s a lot of investment that goes into recruiting,” Raymond James Financial CEO Paul Shoukry said last month during a call with analysts to discuss the firm’s earnings. “The reason we broke out the retention- and transition-assistance-related expense for the first time this quarter is because in the last 12 months, we recruited advisors who had $460 [million in annual revenue] at their prior firms.”

“That’s equivalent to a pretty decent-sized acquisition in our space, especially when you look at what is remaining out there,” Shoukry added.

And that’s a potential hurdle for the industry to face in 2026 when it comes to recruiting; consolidation of the brokerage industry has reached a level leading some to wonder who’s next to be bought, and potentially sending advisors scattering to rivals.

“If you go back at least five years or more, the biggest trigger for recruiting comes from an acquisition like Commonwealth,” said Jodie Papike, CEO of recruiting firm Cross-Search.

“Another big factor is service. Some firms have simply lost touch with what advisors are looking for there.”

“But an acquisition forces financial advisors to look at their options, and I don’t see 2026 being any different,” Papike said.