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November 21, 2012 at 07:00 PM
Gathered at their national conference in San Antonio in early November, Commonwealth Financial executives said they plan to give financial advisors more official options in how they do business with the independent broker-dealer, starting in the second quarter of 2013.
“I’ve spoken with at least three or four advisors who have said they want to drop their FINRA registration and have greater flexibility,” said Commonwealth CEO Wayne Bloom, in an interview. “This is what I call a glide path issue, and we are hearing more and more about it.”
As of next spring, independent advisors will be able to drop their FINRA registration and use Commonwealth’s RIA, for instance, or operate solely as their own RIA. As is the case today, they also can be affiliated with Commonwealth and keep their FINRA registration, be dually registered with FINRA and as an IAR, or run a hybrid business with FINRA registration and their own RIA.
“We are going to take our inward-facing compliance systems and make them outward facing, so an RIA can protect his or her own business and ride on our technology,” said Bloom. “I see it as a way that advisors can go IA only without being alone.”
“The business has evolved to the point that how advisors are registered is essentially meaningless,” he explained. “Offering them tools that open options for them in how they do business, a glide path, is meaningful.”
Commonwealth’s 1,400-plus advisors now produce about $700 million in yearly fees and commissions, 70% of which is fee based. The independent broker-dealer “is marching toward” becoming a $1-billion firm with a $500,000 production average over the next few years, while maintaining its reputation for boutique-level service, Bloom says.
