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Industry Spotlight > Broker Dealers

Broker/Dealer Briefing: Commonwealth Takes the Top Spot

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Batting .500; fantastic in baseball, even better in our Broker/Dealer of the Year annual surveys. One firm has taken the top spot more than any other in the 20 years we've been conducting them–Commonwealth Financial Network. With 10 wins under his belt, founder and chairman Joe Deitch reflects on the firm's history, how far it has come, and of course, what's next.

Investment Advisor: Is the firm as it is today a reflection of your vision when you founded Commonwealth? If not, what have you had to change along the way?

Joe Deitch: Back when I was an advisor, I couldn't find a firm to satisfy my own evolving expectations, and I assumed there were many other professionals who felt the same way. Over the years, our vision became more and more articulate. Today we can express it quite simply: "Quality and Community".

For quality, we strive to literally be the best in the industry in every single thing that we do. We're not looking to just get by, or be merely one of the best–we strive to be the best in every task, function and offering through Commonwealth. And when we reach that goal, we then focus on raising the bar. We're fanatically focused on quality, and know that allows us to stay on track, attract and hire the right people and do the right things.

At the same time, Commonwealth is our home, our community. We spend more time here than anywhere else and it only makes sense to create a community that is supportive, nourishing and dependable. Perhaps this sounds a bit noble, but let me assure you that it's totally selfish. And that's why our turnover among people is so low.

IA: What changes at Commonwealth and in the industry did you expect to see when you founded the firm? What has been unexpected?

JD: Commonwealth was founded in 1979, even before the introduction of the personal computer, so the changes have been dramatic. But it's not just technology–business was so much simpler then. Investment management and wealth management are much more integrated and a long list of powerful applications can be performed in minutes. Both investors and advisors have access to pretty much the same technology so now advisors need to be much more capable and better versed. In 1989 we were the first independent broker-dealer to establish a practice management department. Today, that observation is taken for granted, but back then it was a major change. In a related vein, our Professional Development curriculum for the home office staff has evolved from just a handful of classes to a robust list of 339 distinct offerings. Compliance and regulatory requirements are another area that has exploded, and we have had to respond in kind there as well. But it's not simply about responding–rather, at Commonwealth we always want to be the premier provider of content and assistance for our constituencies.

IA: So why Commonwealth? What sets you apart?

JD: We simply don't have the conflicts of interest that most other businesses (and virtually all other broker/dealers) have. We're on the same side of the fence as our staff and advisors. We are not owned by some parent company with different objectives or proprietary product. We are not traded publicly and therefore don't concern ourselves with quarterly earnings in an unhealthy manner. We don't have corporate executives who are compensated in a way that is contrary to the rest of the staff or the needs of the clients. We also have over 30 years of experience and expertise, coupled with solid financials and healthy cash flows. We simply have the luxury and the ability to do it right. So… with all that in mind, we focus on making the experience rewarding and enjoyable for all of our constituencies: advisors, staff, industry partners and even regulators. All this plays out differently for everyone, depending on their needs and desires at the time. I would also add that each year we survey our advisors on our service ratings (as well as a host of other variables) and they have consistently improved with time, and today, they are at their historic highs.

IA: So how do you plan on sustaining your winning-streak?

JD: As I mentioned, it's all about quality and community. Just words until you know the people behind the accomplishments. And in the end, what I'm most proud of is the people and the relationships and how Commonwealth has become such an important and dependable factor in so many lives. We've been there through career and personal growth, marriages and divorces, births and deaths, and everything else imaginable.


Editor-in-Chief John Sullivan can be reached at [email protected].


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