Second quarter earnings reports show that loan-based revenue is on the rise, according to wirehouse managers. 

Individually, advisors do not share the same feelings, as loan-based revenues surpass other forms of their revenue. According to AdvisorHub, the increase in loan-based revenue fails to offset compensation declines expected as advisory fees fall with equity market valuations. 

An advisor's share of compensation from revenues based on clients' borrowing often fails to compare to payouts they receive from advisory fees and commissions. On the other hand, some advisors may be making more from clients' borrowing revenues than they did before changes in compensation plans. 

According to Danny Sarch, an industry recruiter, advisors contemplating a transition and wirehouses seeking prospective hires need to evaluate each other concerning clients' borrowing needs. Advisors need to ensure that a firm can service the loans of their existing clients. Wirehouses must assess an advisor's books based on profitability and the extent of the loans.   

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.