Page 39 - Investment Advisor - December 2023

rIA leSSONS & leADerS

By Jeff Berman

Commonwealth to open, Hire staff for new

Home office

The expansion comes as other big firms close offices and conduct layoffs.

ommonwealth Financial He added: “Our thinking going into
Network plans to hire staff it was they’re independent advisors.
Cfor and open a new corporate They didn’t want us necessarily [tied
headquarters in Cincinnati by June 30, to] the income side of their earnings.
according to Wayne Bloom, CEO of the They wanted to be more arm’s length.
hybrid registered investment advisor For the most part, that’s true, but we’ve
and independent broker-dealer. The also had some advisors” who said they
new home office will include the firm’s wanted a “deeper partnership” with
two largest call centers, a technology Commonwealth. “So we’d like [these
help desk and service center, Bloom said transactions] to be purely earnings-
in an interview in mid-October. The based or EBOC [earnings-before-own-
firm — now headquartered in Waltham, ers-compensation] based.”
Massachusetts, and San Diego — cur- What Commonwealth is “trying to do
rently has more than 1,000 employees. is really build deeper integrations into
The move to open the Cincinnati to launch Marketplace next year to help our bigger practices to help them run
base is part of a multi-prong strategy advisors with recruiting. The platform better and grow faster,” Bloom said. To
to “keep growing and making sure we aggregates advisor profiles and hiring date, there’s been “maybe a half a dozen
provide great service to our advisors,” needs and then finds matches for them. practices we’ve invested in, and there’s
said Bloom, who helped the firm stage The Commonwealth team will also several more in underwriting now. We’ll
its national conference in mid-October make introductions, as well as provide take up to a 40% stake” and will be
near Denver. support and financing for dealmaking. “staying in a minority position.”
It also stands in marked contrast to the This entails connecting Commonwealth The Private Client group’s suite of
office closures and layoffs announced financial advisors and advisors not yet enhancements aim to help advisors
by other industry players over the affiliated with the firm as part of a new address the complexity of HNW inves-
past few months. Charles Schwab, for recruiting model, it said. tors, Commonwealth said. Resources
instance, is in the process of laying off Business Solutions is also adding will include lending solutions, legacy
some 2,000 employees; it closed five options to its Entrepreneurial Capital planning, tax management strategies
offices in October and shrank the size program, which was launched last year. and concierge services such as book-
of six facilities. Envestnet and Orion The effort includes more types of fund- keeping, performance aggregation,
Advisor Solutions recently cut jobs, as ing via a minority investment in advisor cybersecurity and health care.
did Hightower. businesses. Commonwealth will provide In 2024, Strategic Retirement Solutions
Commonwealth also said recently capital in exchange for a percentage of will provide additional support to advisors
that it will roll out several product and the firm’s earnings on an active or pas- who want to do more business in defined
service upgrades next year that focus on sive basis, it said. contribution plans. A bundled 401(k)
key areas for advisor growth: high-net- “As far as Entrepreneurial Capital solution for small and midsize businesses
worth clients, mergers and acquisitions, goes,” transactions are done “on more will be run by the firm’s PlanAssist team,
and equity funding. The enhancements of a passive basis where we’re taking which handles fiduciary services, includ-
will “build out already comprehen- equity positions in advisors’ practices,” ing selecting and monitoring the plan
sive product portfolios” in its Wealth Bloom explained. “Generally, they’ve lineup and quarterly reporting.
Management and Business Solutions been revenue conversions. They’re High-net-worth clients, defined as
groups, according to a statement. based on earnings, and then we just con- those with at least $5 million in assets,
The Business Solutions group plans vert it to revenue.” now represent about 1% of households

December 2023 Investment AdvIsor 37