Andrew Daniels, managing principal, field development, for Commonwealth Financial, says the independent BD is “tremendously honored and humbled” by getting the highest approval rating in the recent J.D. Power & Associates survey of advisors, and by the fact that its independent contractor representatives “took the time” to complete the J.D. Power survey. However, Daniels says he tells his recruiters “all the time” that Commonwealth remains a “work in progress” that represents a “symbiosis” between Commonwealth and its reps: “They need us; we need them, and our success is directly predicated on the success of our advisors.”
(The J.D. Power award isn’t the only honor Commonwealth Financial has received over the years; 10 times in 20 years it has won Investment Advisor’s annual Broker/Dealers of the Year award.)
Daniels (left) says that Commonwealth “recruits reactively” and the BD’s salaried recruiters add to the rep force at a “careful rate that continues to service the Commonwealth community,” and reflects “an appreciation that growth is critical to survival,” but not growth at the expense of that community. “We don’t want to be the biggest, but the best,” says Daniels.” Moreover, Daniels says that he tells his recruiters not to be “shy” about recruiting “demanding” reps, since those are the advisors who know what they need to grow their practices and serve their clients. As an example, he cites the noted advisor Alexandra Armstrong, whose team joined Commonwealth in 2009, which had “very concrete” ideas about what it needed from a BD to continue its growth.
Noting that any BD rep that considers leaving her firm has to “be in a lot of pain,” considering the work that has to be done to switch BDs, Commonwealth nevertheless “says ‘No’ to 60% of the advisors who want to join Commonwealth,” he says.
Daniels argues that Commonwealth’s approach to business can be signified by how the broker-dealer dealt with a decline in revenue and profits in 2009, a trying year for all BDs. “We balanced it by earning a little less,” he recalls, with the partners taking a hit on the earnings side rather than raising fees on its reps. “Commonwealth didn’t lay off a soul during this recession of the past 18 to 24 months,” Daniels says proudly.
(Look for coverage of Commonwealth’s annual conference from Research and AdvisorOne editor Janet Levaux later this week.)