For some advisors, bigger isn't always better.

When Benjamin Wong's longtime broker-dealer, Financial Telesis, was bought last month by LPL Financial, the nation's largest IBD, Wong had to decide whether he wanted to go along for the ride or find a new IBD.

The answer was the latter -- and after much tire-kicking, he settled on Commonwealth Financial Network.

LPL's massive scale was not appealing, says Wong, whose eponymous hybrid firm -- based in the Bay Area suburb of Pleasanton, Calif. -- has around $700 million in assets under management.

With roughly 14,000 advisors, LPL didn't seem quite right for an independent firm of his size, Wong says.

"Their scale was a factor," Wong says. "It seemed like a mishmash of different broker-dealers selling a lot of different products combined together."


Commonwealth's smaller size, "boutique feel," private ownership and ability to provide scale for its nearly 1,500 advisors proved a better fit for Wong, who has a small support staff and handles client relationships himself.

"The biggest opportunity for advisors is to be able to provide personalized and customized service," he explains. "You want enough scale to be efficient -- but if it's too large, it can be impersonal."

Commonwealth's more conservative investment approach was also a draw. "The fact that only a small percentage of their net revenue comes from alternative investments appealed to me," Wong says.

Technology was also a consideration, he says.

Too many broker-dealers cobble together "a lot of third-party software with some links and call it their own," Wong says. "Commonwealth had the first cohesive platform I saw that made me want to give up my own technology."

Read more:

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access