Commonwealth Financial Network boasts one of the largest fleets of high-end independent advisors in the business, so the company has devised a couple of ways to reward them for enriching the firm.
It plans to increase payout for advisors with more than $50 million in assets under management, Commonwealth announced on Wednesday. Advisors will get a bump up of 2% at every production level between for advisors with $50 million to $500 million in AUM. After that point, it rises 3%. Under its Preferred Portfolio Services, The Waltham, Mass.-based independent broker-dealer will also chop online orders in half for individual stocks and exchange-traded funds, or ticket charges, for fee-based assets.
Hopefully, according to Wayne Bloom, chief executive officer of Commonwealth, the changes will help independent financial advisors compete more effectively with low-cost online brokerages. It might also make it easier for advisors to bring clients on board with the prospect of attentive service. “Independents understand that our marketplace is very different from low-to no-service marketplace,” Bloom sad in a telephone interview. “Clients have difficulty with that. They are bombarded with ads for inexpensive trading.”
About 1,400 independent advisors are affiliated with Commonwealth, and 65% of them have an average production of more than $150,000, according to Financial Planning’s most recent survey of independent broker-dealers.
“We’ve achieved economies of sale, and we are rewarding the advisors,” Bloom said.