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Industry Spotlight > Broker Dealers

How Commonwealth Aims to Track the Industry ‘Puck’

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Commonwealth Financial is on track for $1.4 billion in revenue this year, executives said at the group’s annual conference taking place in Austin, Texas, this week. That’s up from about $1.15 billion in 2017.

But the independent broker-dealer insists numeric growth is not its focus, and there’s no plan in sight to double its roughly 1,800-advisor headcount.

“We continue to step up our game … which puts us in the best position to help you and your investors,” said CEO Wayne Bloom during Thursday’s general session.

Part of this effort, Bloom says, includes a focus on the growing number of RIAs. There are about 75 advisors who have fully embraced this model, “and more are doing so,” the executive said.

According to CFO Trap Kloman, the firm’s RIA team has 22 employees for a ratio of about three advisors to one support staff. “It’s a separate group … that replicates the services offered by our broker-dealer team,” he explained in an interview during the conference, which drew about 1,175 advisors and 745 other guests.

As a growing number of advisors decide to drop their FINRA license and embrace the fee-only business model, “We are working on new service pods for the [fee] ‘onlies’ to serve them optimally,” said Bloom. “We are looking at where the puck is going.”

The younger generations of advisors and financial planners “are more inclined to be fee only,”  John Rooney, managing principal, San Diego, told ThinkAdvisor. “They don’t want the commissions, unlike some of the old timers.”

FINRA President & CEO Robert Cook “gets it,” Rooney adds. “The clock is ticking,” in terms of regulators having the time they need both to overcome barriers that inhibit the long-term growth of traditional Series 7 advisors and to work with the SEC in the short term to harmonize rules that are in the best interest of  clients and advisors.

Other Matters

Regardless of what happens in Washington, Commonwealth wants to “keep the critical feedback coming” from its advisors, Kloman says, so it can further improve its service score of 95.8.

The firm “finally” won its fifth J.D. Power award for advisor satisfaction in the independent channel this year, Bloom told those at Thursday’s general session. A slide soon popped up showing New England Patriots quarterback Tom Brady with his Super Bowl rings next to a photo of Bloom holding five J.D. Power trophies. “Who wore them better?” Bloom asked.

“We’re boringly consistent,” said Andrew Daniels, managing principal of business development. Recruiting has been “fantastic” this year, he added, and “explosive” in the past two quarters.

As for early 2019, Daniels expects further momentum, much of that based on referrals, he said.

“We’re not changing our recruiting [strategies or] … incentives,” said Kloman. “It’s our value proposition that is winning us advisors.”


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