Commonwealth edges out LPL to nab the $1.2 billion retirement firm just down the road

Commonwealth Financial Network has signed on Summit Financial Corp., a $1.2 billion retirement firm.

Led by Joseph Bonasera, Summit was one of only five top-producing firms in the nation to be recognized by Nationwide Insurance in 2010 as a Pinnacle Pension Administrator, a winner’s circle of top-producing firms associated with Nationwide.

Summit is located is Burlington, Mass – a short hop down Rt. 128 from Commonwealth’s Waltham, Mass.-headquarters.
Bonasera says his firm left on Sept. 1 on good terms.

His company has total revenues of $8.3 million from three different businesses including $5.4 million from pension administration, $2 million from he employee brokerage benefit business and $1 million from wealth management clients. (The three add up when rounding is figured in, according to Commonwealth.)

He joined Commonwealth because he liked its pension expertise.

Retirement niche

Bonasera founded Summit Financial in 1993 to provide clients with the kind of personalized attention that he felt was lacking in the retirement space. Bonasera provides customized retirement plans, defined benefit plans and personal tax and financial solutions to organizations and individuals.

The company oversees retirement plans for a wide range of clients, including small closely held companies and large national corporations as well as non-profit organizations. The plan sizes range from companies with just a handful of employees to those corporations with 1,800 employees and $160 million in assets. The company’s sweet spot is plans with about 100 to 300 employees whose assets range from $5 million to $15 million.

Summit differs from many other advisory firms in the retirement plan space because it also acts as a third-party administrator and handles compliance and education for plans.

Maintaining the fiduciary status for plans is a must for Bonasera because of the pending legislation that has put the issue of an advisor’s fiduciary status on the front burner.

In addition to Summit’s successful retirement practice – comprising $5.4 million of total revenue and providing administration, compliance support, consulting, due diligence, fiduciary oversight and fund selection assistance – the firm also operates an employee benefit brokerage business as well as a wealth management firm, which has evolved in just the last six years.

LPL in the running

Bonasera is confident that the IBD is the perfect partner, but he spent more than two years making this decision. During that time, he had many conversations with LPL leaders.

LPL Financial was attractive because the firm’s head of retirement, Bill Chetney, had no qualms about allowing his practice to continue taking on fiduciary responsibility for plans. Bonasera also felt that LPL officials were clearly abreast of rules pertaining to 401(k) plans.

It was certainly a plus that the Summit office, with its 40 employees, is located just minutes away from Commonwealth’s headquarters, and Bonasera was also attracted to Commonwealth’s technology, which he can use to help better evaluate retirement funds. The firm will also use Commonwealth’s CRM for its wealth management clients.

But in the end, the decision came down to culture. LPL also has a corporate presence in the Boston area.

“I think LPL even wanted us to join them probably more so than Commonwealth,” he says. “LPL is a good firm but they’re huge and I think they paint things with a broad brush. Commonwealth is more individualized and that’s what we wanted.”

Big experience

Bonasera has more than 35 years of experience in the industry. Before he founded Summit Financial, he was a pension sales manager with Allmerica Financial for 21 years.

Graduating from Bowdoin College in 1973, Bonasera then received his MBA from Northeastern University and a Master of Science degree in Taxation from Bentley College.