Commonwealth plans big tech investments as more of its advisers drop FINRA


What would you like to know

  • So far, the Commonwealth’s results for 2021 include revenues up about 21% from the same period a year ago.
  • A growing number of Commonwealth Councilors are abandoning their FINRA licenses and switching to fee-only.
  • The company is set to launch improved consulting tools while making a major investment in cybersecurity improvements.

As Commonwealth wraps up a year of strong growth, Wayne Bloom, its CEO, highlighted some of his company’s successes in 2021 and plans for 2022, including the upcoming launch of next-gen versions of its top three advisor tools and a major investment. in its cybersecurity initiatives.

Commonwealth revenue so far this year is up around 21% from the same period a year ago, while commission revenue is up 28% and assets under management are up by about 30% to about $ 270 billion, he told ThinkAdvisor in a recent phone interview.

About 85% of advisors’ income is now based on the firm’s fees, he noted, adding, “The Commonwealth actually looks more like a national RIA than a traditional brokerage.

About 200 of the company’s more than 2,000 advisers have given up their financial sector regulatory licenses and are now affiliated with Commonwealth on a paid basis, he said, adding that around 80 to 100 advisers have abandoned their FINRA licenses. about a year ago. . “I think there are several more that are sort of in line” to switch to the single rate, he added.

As the company noted at its recent national conference, the firm’s advisers are thriving in a difficult year. Other data the company shared at the conference included Preferred Portfolio Services, its managed account platform, reaching more than $ 155 billion.

“We have seen steady growth in the number of clients relying on financial plans, which we believe has a significant impact on investor confidence and discipline,” Bloom told ThinkAdvisor. “We have also seen an expansion in the compensation methods used by advisors for this crucial work,” he said.

“Having full capabilities and access to subject matter experts can serve as a differentiator and engine of growth,” he also said, noting that “it can deepen relationships and isolate advisers. cost reduction “.

Advisor tool enhancements

Commonwealth “is completing work on the next generation of three main tools for advisors,” Bloom said, referring to: Client360 Beta, Trading & Model Management and Digital Onboarding.

Client360 is the company’s flagship tool which, according to him, “contains everything an advisor needs to serve his clients: portfolio management, document management, CRM, performance reports. [and] financial planning. ”This tool“ has a whole new look and improved functionality across the board, ”he said.

Trading & Model Management, Commonwealth’s rebalancing tool, “gets even smarter, allowing things like matches and locks to be customized by account, by model, or in an advisor’s company,” he said. -he declares.

Digital integration, on the other hand, represents “the evolution of our customer account assistant, which allows new accounts to be opened in real time and to modify existing accounts,” he said. The new version “will allow all signatures to be consolidated into a single DocuSign email, and for more digital customer engagement,” he explained.


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