Advisors can use external financing to pay a recruit a recruiting bonus and transitional assistance. This can be used for advisors that are being recruited out of either an employee or independent structure. Depending on which loan program is used, different structures and requirements apply.

ADVISOR RECRUITING & TRANSITION FINANCING

Loan Usage:

• Ideal for covering recruitment and transition expenses (e.g. transitioning from wirehouse to independence).

• Working capital offers financial support during an advisor's move to a new platform.

Funding available for recruitment and acquisition in a single transaction.

Recruiting Transition Loan

Advisors focused on acquisitions are often simultaneously in recruitment mode. Many Registered Investment Advisors (RIAs), Office of Supervisory Jurisdictions (OSJs), and independent broker dealer principals aim to expand their businesses by recruiting advisors to join their teams. They receive a payout from the broker dealer or custodian, then offer a reduced payout to the advisors they bring on board, retaining the difference for the services they provide.

Most advisor business owners are unable or unwilling to match the 10% to 20% (or higher) transition deals that breakaway brokers negotiate when affiliating directly with a broker dealer. To address this challenge, we provide recruitment transition loans. These loans empower recruiting advisors and firms to offer more competitive incentives to attract top talent and provide financial support to new recruits during their initial months of transitioning clients.

Recruiting Note Payoff Loan

We offer assistance not only to breakaway brokers seeking to settle their recruiting debts but also to independent advisors looking to transition smoothly without financial burdens. Whether moving from independent broker dealers or firms, we provide solutions to pay off existing recruiting notes. Advisors who initially received a recruiting note while operating as 1099 can benefit from refinancing options with both SBA and conventional lenders. For those who weren't aware of financing options and covered costs themselves, we offer working capital loans to cover transition expenses and revenue losses. Our aim is to support advisors in their moves by providing tailored financial solutions.

Breakaway Broker Recruiting Loan

Wirehouse advisors manage some of the most substantial and top-quality practices in the industry. They are the custodians of client relationships, with clients valuing their advisor more than the name of the broker dealer on the business card.

There are financing options for breakaway brokers to address various financial needs when transitioning to independence. This includes covering expenses such as settling existing recruiting note balances with wirehouses, funding new office setup and renovations, purchasing furniture, computers, systems, and technology, as well as covering marketing, promotional costs, and working capital to manage income loss and client transition expenses during the initial months.

The traditional firm (W-2) model recruiting notes are perceived as personal loans by the Small Business Administration (SBA) and commercial banks because they were granted to employees, not business owners.