AE Wealth Management, a registered investment advisor and turnkey asset management platform based in Kansas, has rolled out a securities-based lending (SBL) program for its network of approximately 500 independent advisors. The firm, which oversees more than $50 billion in client assets, said the new offering allows individuals, trusts, and organizations to borrow against eligible securities—including stocks, bonds, exchange-traded funds, and mutual funds—without incurring upfront fees or prepayment penalties.
The move, announced Wednesday, expands AE Wealth's capabilities beyond traditional investment management into credit-based services. Advisors can now help clients access short-term liquidity for business investments, real estate purchases, or education funding without requiring them to sell appreciated holdings and trigger capital gains taxes. "Our securities-based lending provides advisors with another flexible and personalized planning resource to deliver liquidity without disrupting their long-term investment strategies," said Shannon Larson, president of AE Wealth Management, in a statement.
Larson joined the firm in February after a six-year tenure at Osaic, and previously held senior roles at LPL Financial and Cetera Financial Group. She brings more than 25 years of industry experience to the role. AE Wealth has set an ambitious target of growing to $250 billion in assets under management by 2035, without relying on private equity or outside capital.
Kevin Thornton, head of sales at AE Wealth, emphasized that the SBL product is designed as an extension of holistic financial planning. "When used appropriately, securities-based lending can help advisors address liquidity needs in a way that complements a client's broader wealth strategy," Thornton said. "By incorporating this capability into our offering, we're giving advisors another resource to help clients pursue opportunities with greater confidence and flexibility."
The SBL program allows clients to draw or repay funds as needed, maintaining their existing asset allocation and market exposure. For advisors, the tool can deepen client relationships by bringing both sides of the balance sheet into view, a capability historically more common at wirehouse firms.
Regulatory Context and Risks
The Financial Industry Regulatory Authority and the Securities and Exchange Commission have both issued investor alerts on securities-backed lines of credit, warning that lenders can change collateral eligibility without notice, potentially reducing borrowing capacity overnight. The SEC's Office of Investor Education and Advocacy cautioned in 2015 that market volatility could amplify losses and, in forced-sale scenarios, disrupt long-term investment plans.
In 2016, Massachusetts Secretary of the Commonwealth William Galvin charged Morgan Stanley with "dishonest and unethical conduct" over internal sales contests that allegedly tripled loan origination and added $24 million in new balances. Such cases are less likely under Regulation Best Interest and the fiduciary standard governing RIAs, which AE Wealth's advisors follow.
AE Wealth's move reflects a broader trend of independent platforms and broker-dealers adding services once exclusive to wirehouses, such as helping clients define purpose beyond portfolio returns. The firm also positions its comprehensive wealth planning as a key differentiator from W-2 models.
With roughly $25 billion of its AUM in managed strategies including model-based and direct indexing portfolios, AE Wealth is betting that SBL will help its 1099-contractor advisors compete more effectively. As the independent space narrows the gap with wirehouses, tools like securities-based lending are becoming table stakes for firms seeking to retain top talent and serve high-net-worth clients.
