Commonwealth Financial Network is introducing an effort to buy minority stakes in advisory firms that utilize its brokerage and registered investment advisor (RIA) services. According to InvestmentNews, Commonwealth will introduce the broad effort in 2023, joining the ranks of competitors, such as LPL Financial, Cetera Financial Group, and Advisor Group.
Commonwealth now will directly compete with RIA aggregators, often backed by private equity money raised on Wall Street. Commonwealth's investment is capped at 40 percent of the equity in an advisor's practice and will focus on veteran or more experienced advisors.
Additionally, Commonwealth announced it would cut its annual fees based on clients' assets in custom and advisor-managed portfolio programs. For example, for clients with $500,000 in assets, the yearly charge is reduced from $390 to $225; for clients with $1 million in assets, the annual charge is cut from $590 to $375.
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