Targeting $1B, advisor team drops Avantax for Commonwealth

A team of financial advisors seeking to grow the size of their practice more than fourfold in the next four years will pursue that goal with Commonwealth Financial Network as their brokerage.

Robert Holton, Tom Driscoll and the three other advisors and two other employees of Waukesha, Wisconsin-based R&R Wealth Management dropped Avantax for Commonwealth prior to the announcement that their former brokerage agreed to be acquired by Cetera Financial Group, Holton said in an interview. Commonwealth unveiled the team in a Sept. 18 news release, noting that R&R Wealth brought $223 million in client assets under advisement to the firm. R&R Wealth aims to reach $1 billion by 2027 through organic growth and acquisitions.

The Riesch family, clients of R&R Wealth who also own insurance and employee benefits firm R&R Insurance, purchased the wealth management business in 2018 as part of a succession plan for the former managing director of the firm, Holton said. R&R hired him last year from BMO Financial Advisors and LPL Financial to be vice president of wealth management and senior advisor alongside Driscoll. The family ownership of R&R and its specialty focus on family business owners as clients matched with Commonwealth, a privately held firm that's never taken on outside investment, Holton said.

"We felt like Commonwealth really understood that culturally and how that fit with us," he said. "It was no fault of Avantax. We were just developing in a different direction and felt like Commonwealth was a better partner and had no knowledge of the agreement with Cetera before we made this decision to move."

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Representatives for Cetera and Avantax, which Cetera's parent valued at $1.2 billion in its deal to purchase the tax-focused wealth management firm of more than 3,000 advisors, didn't respond to a request for comment.

Advisors often view a change in brokerage as a means of harnessing their growth potential, according to recruiter Mark Elzweig of Mark Elzweig Company. Sometimes the switch could help them drop "nuisance accounts that are really kind of sucking up your time and impeding your growth," he said. Other times the simple fact of a fresh start plays a big role in the move.

"A lot of times when you make a move and you kind of change your surroundings, you get a surge of energy and focus. When people are in one place too long they can fall into a routine and become stagnant," Elzweig said. "That's what most advisor conversations with prospective firms are about: Advisors want to select the venue that can help accelerate their growth."

Holton and Driscoll also switched their RIA from that of Avantax to the corporate advisory firm of Waltham, Massachusetts-based Commonwealth, which is the No. 7 firm on Financial Planning's annual IBD Elite rankings of the largest independent brokerages in wealth management at $2.07 billion in revenue last year. Commonwealth retained its perennial top spot this year on the J.D. Power U.S. Financial Advisor Satisfaction Study.

"Over the years, we have worked tirelessly to create a culture that promotes the success of our advisors and fosters a high level of entrepreneurialism — R&R Wealth will bring its like-minded spirit to our community of independent advisors," Commonwealth Chief Business Development Officer Becca Hajjar said in a statement. "More tangibly, we look forward to providing flexible financing, investment management and retirement planning support to allow R&R Wealth to take the next step in the evolution of its firm."

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Besides Holton and Driscoll, the R&R Wealth team includes financial advisor Bill Ernest, Director of Retirement Plan Services and financial advisor Jason Musante-Klumb, financial advisor Brent Ogden, Senior Wealth Management Assistant Kim Fetzer and Wealth Management Assistant Dawn Starck. The firm conducted a request for proposals and more than six months of due diligence before choosing Commonwealth as its brokerage and RIA. R&R formally affiliated with Commonwealth on Aug. 17, according to FINRA BrokerCheck.

The family ownership of R&R Wealth will enable the firm to reach its target size without searching for any other outside capital, Holton said.

"They have the resources to back us in our growth ambitions without having to rely on private equity or any other source of funding," he said.