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Commonwealth is also bulking up its business suite to be attractive to fee-based advisors and RIAs. “RIAs are really looking for more suite of services and business solutions that help them organically grow with their existing clients, but also how to help attract new advisors to their business,” Kloman said. “That’s dramatically being under-served in the RIA space.”
if an advisor asks. But the firm currently does not have a way to make other custody platforms integrate with its advisor desktop, powered by its homegrown technology platform Advisor360, now a standalone company. The firm is starting to look at other software providers that will complement its native relationship with A360. “The reason firms like multi-custody is basically the ease of
being able to acquire something else, and not have to do a ton of paperwork to move from one platform to another. It’s a one-time friction,” Kloman said, but the benefits of keeping the accounts with one custodian, in terms of data flow and ease of trading and performance reporting, can often outweigh the one-
The suite includes operations consulting, outsourcing services and the capital program. Advisors can outsource human resource services and record-keeping and reporting functions to third parties on the platform. Commonwealth-provided services include marketing, investment management, virtual paraplanning, a virtual administrator, risk and compliance functions and other technology. In 2021, the firm brought on Alexander Hansen as a senior vice president of RIA compliance. His team is dedicated to shoring up compliance support for fee- only advisors, especially those
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At Commonwealth, the real value is us being a business partner for you...
time effort to transfer the assets. Matt Chisholm, senior vice president of RIA services and practice management, said that long-term the firm will likely
who are looking to start their own RIA, whose team of compliance staff could be on the ground in an advisor’s office “within hours” of an SEC audit or inspection, if need be, Bloom said. While many of the custodians don’t charge a fee to RIAs to use their platform, Commonwealth executives said it’s the services and support—the middle-office function— that differentiates it from other custodians and validates its pricing model. Trades may be free at Schwab, but that’s only for ETFs, equities and options, not mutual funds. “Nothing’s free in this world. There’s no trading fairy out there that Schwab has,” Bloom said. “At Commonwealth, the real value is us being a business partner for you,” Kloman said. “So I don’t necessarily feel us competing head to head with Schwab. I think it’s two different business models that can coexist just fine in the industry. Ultimately I feel much better about the long- term viability of our P&L, our balance sheet, because we’re being paid for the value we’re creating.” Commonwealth primarily custodies with National Financial Services, but it will accommodate outside custodians,
move to provide that multi-custodial experience, as Commonwealth continues to help firms start their own RIAs. “That’s where we look at potentially more technology flexibility, which then is a gateway to potentially multi- custodial experiences or just preferences. Someone wants to use a specific tool or technology that’s not part of the integrated experience—accommodating those through API technology and integration certainly starts to make our technology and operating experience on par with a custodial-driven solution.”
Diana Britton is the Managing Editor of WealthManagement.com, covering asset management and independent Diana Britton Managing Editor, WealthManagement.com
broker/dealers from all angles. She’s also the host of The Healthy Advisor, a podcast focused on advisor health and wellbeing. A native of Los Angeles, she now lives on Long Island.
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