Why a $6B firm went hybrid with Commonwealth, LPL

In its bid to retain client assets and advisors from its acquisition of Commonwealth Financial Network, LPL Financial has secured a big prize: a Worcester, Massachusetts-based firm with $6 billion in assets.

The firm, Bartholomew & Company, announced this week that it is now listed with the Securities and Exchange Commission as a registered investment advisor. Crucially for LPL, the new hybrid RIA will keep its brokerage affiliation with Commonwealth.

That means the $6 billion Bartholomew & Company now oversees for clients will be moved to LPL this fall from Fidelity Investment's National Financial Services — the custodian now used by Commonwealth for safeguarding assets and other services.

Bartholomew & Company

Bartholomew CEO and Chief Investment Officer Alex Bartholomew said in an interview Tuesday that he and his colleagues have wanted to start an RIA for a long time. But rather than sever all ties to Commonwealth — as some have done since the sale was announced last year — Bartholomew said he and his partners recognized early on that they wanted to maintain their relationship.

"We made the determination a long time ago — over a year ago — that we were staying," Bartholomew said. "Regardless of how we chose to affiliate, the question of staying or not was never up in the air. It was really just working with them collaboratively to say, 'Hey, we, we really want to use this as a catalyst to launch the RIA.'"

Bartholomew boasts largest asset tally for remaining Commonwealth firms

Questions have swirled around LPL's ability to retain Commonwealth assets and advisors ever since LPL announced last year it would buy its former rival independent broker-dealer. LPL executives have expressed confidence that they will retain at least 90% of the $305 billion in client assets Commonwealth had at the time of the purchase — a goal crucial to justifying the $2.7 billion price LPL paid for the deal.

Even so, hundreds of advisors have left. Many have joined LPL competitors such as Raymond James, Kestra Advisory Services, Cambridge Investment Research Advisors and Cetera Investment Advisers, or have started their own RIAs. 

With its asset total, Bartholomew & Company is a big fish in the Commonwealth pond. Bartholomew said about $3.5 billion of the firm's total assets come from institutions — primarily city and town governments in Massachusetts and nearby states. The rest is from individual clients.

Bartholomew said about 40 people, roughly half of them advisors, are at Bartholomew & Company. Client assets will be held on LPL's Strategic Wealth Management platform, which allows advisors to custom-build investment portfolios for clients.

Bartholomew confirmed that he and his colleagues received a generous offer from LPL to stay with Commonwealth. 

"I think they did that for everybody," Bartholomew said. "A very big part of that is what Commonwealth negotiated to make sure that the Commonwealth community of advisors were incentivized to stay."

LPL did not immediately return a request for comment. 

Bartholomew puts great faith in LPL's promises

Other firms were eager to recruit his team away from Commonwealth and probably would have offered a strong transition deal for making the move, Bartholomew said. But he and his partners never really considered leaving.

Bartholomew said he and his partners put a lot of stock in LPL CEO Rich Steinmeier's repeated assurances that LPL will retain everything about Commonwealth that has made it beloved to many of its financial advisors. That includes not only maintaining its separate brand but also many of its back-office employees and an internal feedback system that lets advisors easily log complaints, comments or suggestions for improvement. 

"We get the best of both worlds," Bartholomew said. "We have the service model of Commonwealth, the JD Power Associates' recognition of that service model, the same people we've been working with for 30 years, in many cases, and we get the size and scale and freedom and flexibility of LPL as a custodian and broker-dealer."

Possibility of adding other custodians following recruiting, M&A

Bartholomew & Company's affiliation with Commonwealth Financial Network goes back more than three decades. Alex's father, Tom Bartholomew, started the firm at Commonwealth in 1994 after spending the early years of his career at various other broker-dealers.

Alex Bartholomew joined in 2010 and added the title of CEO to his existing position as chief investment officer last year. He said Tuesday that although Bartholomew & Company has plenty to do now with the business of setting up an RIA, he can foresee a day when the firm may try to grow either through advisor recruiting or the acquisition of other firms. 

Should that happen, there's a possibility he and his partners will bring in another custodian besides LPL.

"It would really have to be the catalyst of recruitment and M&A that could potentially open those doors for the right reasons," he said. "That's not a 2026 conversation, though, at all. We're committed to LPL for a long time."