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Boston, Mass.-based Commonwealth Financial Network on Wednesday announced it has added Tonkinson Financial, Capital Wealth Management, and Smallwood Capital Management--three independent financial services firm formerly affiliated with troubled Securities America.
Commonwealth officials said the three firms joined Commonwealth this month and bring more than $400 million in combined total client assets.
The three independent firms left Nebraska-based broker Securities America in the wake of a scandal in which clients of the broker-dealer lost an estimated $400 million in an alleged Ponzi scheme involving private placements in Medical Capital securities. Securities America's parent company, Minneapolis-based Ameriprise Financial, agreed in April to pay $150 million to settle the claims. At the time of the settlement, Ameriprise said it would be searching for a buyer of Securities America.
Founded in 1979, Commonwealth Financial Network is a registered investment advisor and privately held independent broker-dealer, with headquarters in Waltham, Massachusetts, and San Diego, California. It supports more than 1,400 independent registered representatives nationwide.
Commonwealth's year-to-date total advisor revenue has increased more than 57 percent compared with the same time period last year. The firm will receive an additional $9 million in gross dealer concessions from new Securities America advisors as of the end of third quarter.
Miami, Florida-based Tonkinson Financial generated $2.1 million in GDCs in 2010 and manages more than $200 million in client assets.
Tonkinson Financial founder and managing partner Richard Tonkinson said he realized at one point during American Securities scandal that it was time for his company to move on.
"You
have to have confidence in each other," Tonkinson said. "That's the
part that kind of hurt with Services America. Despite the fact that
there's wonderful people out there in Omaha, you just kinda after a while
lose the confidence that they (Securities America) could move on. It was getting too
convoluted; it was getting to `what's the next crisis that they have to
deal with."'
Commonwealth, says Tonkinson, provides a new start for his firm.
"Yes, it's basically to re-start and to re-group and start fresh," Tonkinson said. "We were looking for many different aspects to improve on in marketing, Web page, compliance, and technology. No matter how you looked at it, Commonwealth is a step higher--the next level compared to where we were before."
Tonkinson said his firm had considered Commonwealth more than six years ago. "But at the time, we thought Securities America was a better fit," Tonkinson said. "But six and a half years later, we're seven times bigger than we were. We basically outgrew Securities America. With Commonwealth, we're going from a small to a medium-sized financial services shirt."
Glastonbury, Connecticut-based Capital Wealth Management, led by founder and managing partner Thomas J. Hine, generated revenues of $1.2 million in 2010 and oversees more than $120 million in total client assets.
"Commonwealth's forward-thinking executives and their attitude toward assisting the advisor in servicing their clients is refreshing," Hine said. "The firm's superior software and technology will allow my team to improve on the excellent service we already provide for our clients."
Shrewsbury, N.J.-based Smallwood Capital Management generated revenues of $900,000 in 2010 and oversees $100 million in total client assets. Managing partner John L. Smallwood was ranked in the top 100 advisors at Securities America for the past five years.
"I wish I made the move three years ago," Smallwood said. "Commonwealth has the best technology package, and it is truly integrated. This translates to better control of the business, better services to our clients, and decreased expenses. Above all else, it is the people in the home office who have been a pleasure to work with each and every day."
—Jim McConville
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