Commonwealth Financial Network is said to be pursuing a sale of a minority stake in the company.
The news was reported Tuesday afternoon by Citywire, which cited multiple unnamed sources who believe Commonwealth has retained Goldman Sachs to serve as its investment banker for the capital raise.
Asked for comment on the veracity of the report, Commonwealth CEO Wayne Bloom said in a written statement: “We regularly receive inquiries on rumors that Commonwealth is for sale. As a matter of company policy, we do not comment on those rumors.”
Goldman Sachs declined to comment, but one source reportedly said prospective investors have already placed first-round bids on Commonwealth.
PE's Growing Role
“Many private equity firms are seeking to invest more in the independent advisor market, and few opportunities will exist at this scale,” Roame told ThinkAdvisor via email.
The firm has more than 2,200 partnering advisors managing just shy of $300 billion in advisory and brokerage assets.
“Commonwealth is one of the last few independent broker-dealers of scale that remains private,” Roame added. “I expect that it will draw substantial investor interest. Commonwealth serves fairly upscale FAs, which will be attractive to buyers.”
As Roame noted, Commonwealth was founded by entrepreneur Joe Deitch in the late 1970s, and Deitch remains the chairman and primary owner.
“This may in part just be good estate planning,” Roame said. Such a move was undertaken by Fisher Investments and its founder Ken Fisher earlier this year.
Momentum
In his most recent conversation with ThinkAdvisor, Bloom emphasized that today's independent advisor has grown much more interested in partnering with RIA platforms and other third parties to add efficiency and scalability to their process.
This is especially true on the investment side, he noted, and when it comes to services sought after by more sophisticated clients seeking support with tax oversight.
"That why I like to think of us here at Commonwealth almost as time merchants," Bloom said. "If we can give advisors back more of their time to focus on winning and serving clients, then we're doing what we set out to do."
The other big update, Bloom observed, is the opportunity for advisors to embrace an "outsourced CTO" approach to managing their evolving tech stack within the Commonwealth ecosystem.
"Again, this is about allowing advisors to focus resources on meeting client needs rather than managing an IT team and equipment," he explained.
Pictured: Wayne Bloom
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