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Commonwealth Sets $1T Growth Goal As It Leans Into RIA Market

By Diana Britton Managing Editor WealthManagement.com

At its National 2022 conference held in San Diego this week, Waltham, Mass.-based Commonwealth Financial Network executives announced a new goal: To grow from some $250 billion in assets across about 2,000 advisors to $1 trillion, and do so largely by continuing its transformation into what executives say is really a national RIA. “While $1 trillion is a pretty meaningful number, it’s only about four times bigger than we are today,” CEO Wayne Bloom said. “And it equates to approximately a 14% compound annual growth rate,” less than 0.5% more than what Commonwealth has achieved over the last few years. “Most importantly, it’s growth that will be well-managed and done in sync with our mission, vision and values.” There are a number of projects and initiatives that cascade backwards from the goal, Commonwealth executives said, and leaning further into the RIA market will be key. Already, some 80% of the firm’s assets are in fee-based accounts, as well as 90% of the flow. So far, nearly 300 Commonwealth advisors have fully dropped

their Series 7 FINRA license, with the vast majority opting to operate under Commonwealth’s corporate Form ADV. About a dozen advisors have chosen to register their own RIA, using the Commonwealth suite of services to support the business. “We’re more a national RIA than we are a b/d,” Bloom said, in an interview with WealthManagement.com. The difference is a fully integrated package of services still privately owned and a scale that can deliver those services for low fees. “When you look at where the support (for the RIA channel) is coming from, it’s typically been custodians, and then disaggregated third party tech. Now you have the private equity-backed roll-ups coming in. No one has really put together,” a fully integrated suite of support services for RIAs, including brokerage, custodial, and technology, said Trap Kloman, president and chief operating officer. As for competitors, like Charles Schwab, offering a plug and play package of tech and services to RIAs for free? “Do you really believe it’s free?” said Bloom, referencing the money Schwab makes on order flow and cash sweeps.