Commonwealth Financial Network added $15.9 billion in new client assets last year to help bring the independent broker-dealer and registered investment advisor to $296 billion in assets under management, the company said. The firm's ability to attract advisors overseeing large asset pools and earning almost twice what reps at other top IBDs generate continues to set a bar for the industry while attracting successful professionals.
Although it's a private company and not required to report any financial details, the solid recruitment growth—a firm record for the second year in a row—was worth publicizing as it was the result of putting in place a series of initiatives and products that lured advisors looking for independence with office support, said Becca Hajjar, managing principal and chief business development officer at Commonwealth.
According to the Waltham, Mass.-headquartered firm, it onboarded 292 advisors nationwide in 2023, either in new practices or joining existing practices. Some $15.9 billion in client assets followed them, representing a 42% increase over 2022 for this asset channel. In 2022, the firm onboarded 270 advisors with $11.2 billion in AUM, and, in 2021, 204 advisors with $7 billion in AUM, the firm said.
Whether advisors are leaving a broker-dealer for a fee-based world or changing RIA houses, they have lots of choice for support and partnership in the industry, and Hajjar said Commonwealth continues to update existing offerings and launch new ones to attract those professionals. As the industry has consolidated, the firm has expanded a number of programs that allow its reps to create and join larger enterprise advisory shops.
A major focus at the firm has been on helping its affiliate firms create enterprises. “We’ve rolled out several things that have been ringing true with prospective advisors,” Hajjar said. “First and foremost, there’s our entrepreneurial capital program. We’ve always lent money to our advisors who are looking to buy their practices, but now there’s also the ability to lend money for their growth opportunities.”
Those would include acquiring another advisor, expanding staff or launching marketing initiatives, she said. Commonwealth has also rolled out programs offering different kinds of office support, such as paraplanners or remote administrative assistance available weekly in increments of eight hours.
“That has been extremely successful and in demand where not everyone wants to hire another support person for their practice,” Hajjar said. “They might just need someone part-time.”
And aside from the nuts and bolts of portfolio management options, mentoring and next gen development, another popular service is branding, including website design.
“Whether folks are going independent or whether they’re making a leap, they need to refresh their brand. Our brand studio will not only help them rebuild a website, but will help them really think about their brand holistically and what that means,” she said. “In many cases, it’s coming up with a new name. Or a name for the first time.”
While most of the recruits joined Commonwealth to set up their own firms, close to $820 million of the new client assets came with advisors joining existing practices. Those assets increased nearly 34% over 2022, the firm said.
“Some want to join a team and don’t want to be on their own, or they’re joining an existing practice because they weren’t able to find a successor at their firm,” Hajjar said. “So they join a team that’s at Commonwealth already, partner with them and us, so that they’re joining who’s going to be their successor.”
As of the end of 2023, Commonwealth had nearly 2,200 affiliated advisors across the country.
Roughly 80% of Commonwealth’s revenue comes from its fee-only advisory channel, with the remainder coming from legacy brokerage businesses, Hajjar said.
“As their businesses evolve and they become more advisory, those advisors can drop their Finra licenses and be fee-only with us under our corporate RIA, or they can set up their own RIA,” she said. “Having that evolution and flexibility with their practice is huge.”