BROKER DEALER | ESTATE PLANNING | ASSET PROTECTION | INSURANCE | INVESTING | REAL ESTATE | RETIREMENT | TAX PLANNING

Commonwealth had 300-plus advisors who were RIA-only and weighing all their options before the recent LPL acquisition.

By Jennifer Lea Reed and Jacqueline Sergeant

In the years leading up to its sale to LPL, Commonwealth created an RIA-only unit that grew to more than 300 advisors. Commonwealth executives have said in interviews that this business model greatly appealed to younger advisors coveted by the financial services industry.

And their desire to defect and go off and launch independent RIA firms of their own isn’ t a big shock to LPL’ s management, which researched the matter before spending almost $ 3 billion on its rival firm.

“ It shouldn’ t be too surprising given the makeup of the Commonwealth advisors where they skew more towards advisory,” said LPL CEO Rich Steinmeier during the company’ s second quarter earnings call in late July, referring to the uptick in Commonwealth advisors striking out on their own.“ Many of them were already moving down the pathway to dropping their license.”

Most of the Commonwealth-affiliated advisors who are RIAonly, as opposed to dually licensed hybrid RIAs, operated their business through the broker-dealer’ s corporate RIA custody unit. Some of them may retain LPL as a custodian, but many ap- pear to be making a full break. Steinmeier reiterated a previous statement that LPL would retain 90 % of all Commonwealth advisors. Yet competing broker-dealers are aggressively seeking to recruit the Waltham, Mass.-based Commonwealth’ s reps. The acquired firm’ s advisors average $ 1.16 million in annual revenues, most of it in recurring fees, according to Financial Advisor’ s annual independent brokerdealer ranking. That’ s more than double the $ 430,000 generated last year by the average LPL rep and a big enough business to support a stand-alone operation.

There are other companies affected by the acquisition as well. Take Fidelity, which is losing Commonwealth as probably its biggest clearing and custody client. Fidelity is reportedly aggressively seeking advisors to move to its platform as RIAs or as hybrid advisors on other broker-dealer platforms. Some Commonwealth advisors were very comfortable with the Fidelity team, not to mention Commonwealth itself as their back office.

There certainly has been plenty of public discussion among Commonwealth advisors about whether and how best to leave.

It has not escaped the notice of Commonwealth reps that RIAs are selling their firms to private equity investors and commanding huge multiples in the process. RIAs also enjoy greater independence and flexibility, and they don’ t have to deal with the oversight of the Financial Industry Regulatory Authority, whose regulations they often regard as a nuisance.

Among the former Commonwealth teams that launched newly minted RIAs over the summer are Spiegelman Wealth Management in Alamo, Calif.; Odyssey Group Wealth Advisors in Lancaster, Pa.; Monson Wealth Management in Kaysville, Utah; Milestone Financial Associates in Macungie, Pa.; and Alliance Private Wealth in North Reading, Mass.

These firms switched custodians as well. Monson went to Raymond James, while Milestone switched to Schwab, Alliance and Spiegelman to Fidelity and Odyssey to Altruist.( Some other advisors have left Commonwealth simply to join other broker-dealers. They include Leo Boisvert and Erik Heben, who went to Raymond James Financial Services in Fort Myers, Fla.; Jeremy Beck and his team at Buffalo Fi-

SPTEMBER 2025 | FINANCIAL ADVISOR MAGAZINE | 29