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Commonwealth, LPL Now Using Asset Levels, Not Production Rates, to Calculate Recruiting Deals

23:11 24 January in In the News by rafferty

January 24, 2022 By Diana Britton, WealthManagement.com Commonwealth is now structuring its forgivable notes for new advisors as basis points on the advisors' assets, rather than their production—another sign it continues to see itself as a national RIA.   Waltham, Mass.-based independent broker/dealer Commonwealth Financial Network has confirmed that it recently shifted the way it structures the deals it gives prospects as an incentive to join the firm. It now offers forgivable notes based on an advisor’s asset levels, rather than a percentage of production, which has historically been the norm. A third party recruiter, who declined to be named, said the deals range from 30 to 35 basis points on assets. “Commonwealth remains at the forefront of where the industry is going, which we believe is toward assets versus production,” said Andrew Daniels, managing principal, business development. “As...

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New Study Links Private Equity Ownership to Advisor Misconduct

13:54 10 January in In the News by rafferty

January 6, 2022 By Diana Britton, WealthManagement.com Registered investment advisory firms that take on private equity owners are likely to see higher rates of advisor misconduct after the buyout, according to a study released late last month by the University of Oregon. The researchers found that private equity–backed RIAs had a 147% increase in the percentage of their advisors committing misconduct and 200% increase in the average number of misconduct incidents after the ownership change. Those results were driven mostly by regulatory conduct and customer disputes, the study said. The rate of misconduct is even greater at firms with higher post-buyout growth in assets under management per advisor, and the study notes that it’s concentrated at firms serving retail clients. The results of the study suggested that private equity firms target RIAs with cleaner...

‘Upfront Money Should Be a Spice, Not a Main Course’: Recruiter Jon Henschen

20:06 03 January in In the News by cristi.barkley@gmail.com

December 30, 2021, By Jane Wollman Rusoff ThinkAdvisor To a large extent, [broker-dealers] are just forgivable note peddlers. That’s their primary sales pitch when they talk to advisors — what we’ll give you if you move,” argues recruiter Jon Henschen, in an interview with ThinkAdvisor. “Upfront money should be a spice, not a main course,” says the founder of Henschen & Associates. “That should not be a primary motive for moving, by any means.” Henschen also has a strong view about BDs who mark up outside money managers’ fees, which are paid by the client. The advisors typically aren’t aware of “the manipulation,” he says. “Some of the firms are getting downright abusive in their markups. The broker-dealers certainly make things opaque and hidden,” he notes. Henschen opened his firm in 2001 and is nowadays...