Stifel, Nicolaus & Co. reduced its outstanding advisor recruiting loans by more than 13% year over year, countering a trend among several competing wealth management firms.
According to AdvisorHub, Stifel reported $653 million in outstanding balances at the end of the third quarter, down from $751 million a year earlier. The figure includes cash awards, loans and advances to advisors and other employees.
Other firms have moved in the opposite direction. Ameriprise Financial, which has approximately 10,000 advisors, reported more than $2 billion in forgivable recruiting and retention loans, a 29 percent increase from the prior year.
Raymond James Financial also increased recruiting-related compensation. Although the firm does not disclose a comparable loan balance, it reported a 28% year-over-year increase in recruiting and retention expenses, reaching $125 million in the third quarter. According to AdvisorHub, those expenses included cash and equity awards that vest over five to 10 years.
Stifel's declining balance reflects both the vesting of earlier loans and slower recruiting activity. During the 12 months ended in September, the firm added 90 advisors, including 28 experienced advisors who generated $19 million in annual revenue at their previous firms. AdvisorHub reports that that figure represents a decline from the $30 million Stifel reported in the second quarter.
Stifel Chief Executive Ron Kruszewski has maintained that the firm takes a conservative approach to recruiting offers despite competition for experienced advisors. In January, however, he suggested the firm might increase its recruiting budget.
According to AdvisorHub, the differences extend beyond regional firms. Morgan Stanley, which has recruited large advisor teams nationwide, reported more than $5 billion in recruiting-related expenses. UBS Wealth Management USA, meanwhile, reported a 6.9 percent year-over-year decline in recruiting loan balances to $1.44 billion as it works to rebuild recruiting momentum among its approximately 5,600 brokers after last year's slowdown.
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