It’s been just about two months since LPL Financial announced its acquisition of Commonwealth Financial Network for $2.7 billion in cash, a move that surprised many in the wealth management community given Commonwealth’s reputation as a fiercely independent and privately held organization.
In the time since, Commonwealth advisors have expressed both skepticism and open-mindedness about joining LPL, in private conversations and public media interviews. Some advisory teams have already decided to jump ship, while others have moved to join Commonwealth amid its transformation into a unit of a publicly traded company.
Big and small firms alike are making efforts to recruit Commonwealth advisors, including Raymond James, Wells Fargo and Cetera — the last of which published an open letter early Monday seeking to win over Commonwealth advisors skeptical of joining LPL.
A Sharp Message
It’s the second such appeal from Cetera Wealth Management President Todd Mackay, the first having been published in April soon after the LPL acquisition was announced.
“Over the past several weeks, we’ve had honest, eye-opening conversations with many of you,” Mackay wrote. “Our conversations have made one thing unmistakably clear: You’ve built something meaningful — rooted in independence, trust and purpose. And now, you’re watching that foundation start to shift.”
From there, Mackay’s letter takes a pointed tone about LPL’s ability to meet its promises to maintain Commonwealth’s culture.
“There’s a lot of talk about LPL retaining what makes Commonwealth special, but their history of acquisitions tells a different story,” he wrote. “The eye-catching transaction value and structure; the delineated hundreds of millions of dollars of synergy savings; and yet, the promises to preserve the culture. It simply doesn’t add up.”
LPL provided the following statement regarding the new letter: “It’s clear some firms are trying to buy their way out of the chaos, complexity, and stagnation that comes from joining them. We are honored to partner with Commonwealth advisors on ways they will maintain the integrity of the Commonwealth community, and we remain confident that we offer the best long-term value proposition for them and for Commonwealth.”
In prior commentary shared with ThinkAdvisor and included in public disclosures, LPL executives have repeatedly pledged a seamless transition and “meaningful continuity” for Commonwealth advisors. They have also promised an upgraded best-of-breed platform, including more flexible technology, a more comprehensive product set, extensive research, and capabilities like LPL’s liquidity and succession offering.
Tough Questions
Mackay suggests advisors joining LPL need to ask themselves some tough questions: “Will the back-office team you’ve come to rely on be consolidated? Will the Fidelity/NFS custody and clearing model you’ve optimized for be replaced? What happens if the tech stack that sets you apart is sunset? Is your flexibility quietly narrowing — one decision at a time?”
The bottom line, Mackay said, is that “synergies don’t just fall from the trees.”
“They have to be harvested by making tough decisions and consolidating into existing, scaled, unified processes and offerings,” he wrote. “The fact is that LPL cannot achieve the synergies it has touted without consolidating technologies, eliminating clearing and custody choices, and dramatically reducing headcount. … Commonwealth was acquired so LPL could scale and become even bigger. That benefits their shareholders, but how does it benefit you?”
Making Cetera’s Case
After sharing these criticisms, Mackay’s letter makes the case for Cetera as a better destination for Commonwealth advisors.
“At Cetera, we’re not trying to be the biggest,” Mackay wrote. “We're focused on being the best fit for advisors who believe this is still a relationship business. We’ve built an ecosystem — not a platform. We support multiple models, multiple custodians and multiple definitions of success. We’re not here to pick winners and losers.”
This approach, according to Mackay, means advisors can both choose their affiliation model and maintain their brand. They also have choice in technology selection and access to Cetera’s growth guarantee program.
Also notable, Cetera is offering up to 150 basis points of transition assistance while giving advisors the choice of staying on Fidelity/NFS, moving to Pershing, or moving to Cetera’s own platform for self-custody and clearing. It’s also promising “white glove” transition onboarding.
“This is not a retention check,” he wrote. “It’s a runway — for your next chapter, your way.”
Pictured: Cetera Wealth Management President Todd Mackay
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