When it comes to recruiting advisors, Commonwealth Financial Network looks for a key quality: Nice.
“Who do you want to deal with every day? Well you want to deal with people who you actually like,” said managing principal John Rooney. “I mean life’s too short, you know.”
Rooney, along with current CFO and incoming COO Trap Kloman and managing principal for business development Andrew Daniels, gave Financial Planning insights into Commonwealth’s recruiting practices during an interview at the firm’s annual conference in Austin, Texas earlier this month, an event that drew 2,000 advisors and other attendees.
The executives said that while Commonwealth, which is the
In fact, the Commonwealth executives say the firm’s largest producer loss of 2017 came about because Commonwealth didn’t think the advisor was nice enough to stay.
Kloman, a former LPL Financial executive who joined the firm three years ago, declined to discuss any details on the ex-advisor whose bad attitude he said had “slipped through the cracks” before the departure. In a typical year, fewer than five advisors leave the firm, he said.
Commonwealth expects to boost its annual revenue by roughly $160 million this year to $1.4 billion, with about $700,000 in revenue per advisor. Its gross recruited revenue will also reach a record $66 million, Daniels said.
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“Being absolutely clear that we want to work with nice folks, with fee-oriented advisors, with growth-oriented advisors, with compliant advisors who put their clients first,” Daniels said, “sets the scope for who we’re going to try and recruit.”
While Commonwealth did lose
And on Nov. 1, advisors Bill Hastie and Haley Hitchman of Salinas, California-based Hastie Financial Group, which has more than $228 million in assets under management, left LPL for Commonwealth.
Hastie had been with LPL since 1994, but Commonwealth’s advisor service and technology drew him, he said.
“We saw that we couldn’t give exceptional service to our clients if we didn’t get exceptional service from our broker-dealer. That was probably the biggest thing for us,” he says. “We just felt that Commonwealth would really support our model.”
Representatives for LPL didn’t immediately respond to a request for comment.
The No. 1 IBD in revenue just
“We've attracted a mix of advisors who use more of our services and drive the higher return on assets,” Arnold
Commonwealth, which hasn’t made an acquisition since 1992, has opted for a different path than other firms in the space, Daniels said. The firm would rather take its chances looking for advisors who fit its approach than deal with the vast majority of advisors at any potential seller who don’t, he explained.
“I want to add producers who want to grow their business, because, as their topline grows, Commonwealth will grow without adding more people,” Daniels says. “We want people to be here forever. If you come here, I want this to be the last move you ever make.”
