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Commonwealth racks up a $100 million LPL team by using its broker-dealer's greater size against it

The Waltham, Mass.--based IBD believes this is LPL's soft underbelly because small-and -familial is why many advisors joined the old Linsco/Private Ledger from wirehouses in the first place

Author Lisa Shidler August 9, 2012 at 5:50 AM
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Bryan Chew (l.) with his team: I felt there wasn't anyone I could turn to at LPL.

Brooke Southall

Brooke Southall

August 9, 2012 — 4:54 PM

Mr. Stop Lying,

I pulled your comment. I tried to email you back but apparently you left a bogus email, so it bounced back to me. I don’t like having hyper-cynical comments, and definitely not from people who won’t stand up for what they say.

Brooke

Joe Rogers

Joe Rogers

August 9, 2012 — 7:13 PM

I actually saw the comments that Mr. Stop Lying posted a while ago and thought I would see if anybody else added comments as I find the topic of recruitement of advisors interesting. While the poster was cynical, you just deleted them? A bit worried about the content are you?

Are you saying that his comments that Alternative Investment strategies can’t be purchased without comissions is wrong. Your article says “alternatives, which are commission products” This is clearly a mistatement and factually wrong. My goodness this is RIABIZ, most RIAs who use alternative investmet strategies don’t get paid comissions to hawk products generally.

Having worked in the industry for well over 15 years I can tell you that the comment about the broker who was getting a large amount of his revenues from comissions switching broker dealers because he wasn’t getting attention enough attention from his managers or he could get help with his computer is ridiculous. The “rescue me” feature where an IT tech goes on your computer is a pretty standard feature most decent IT departments use to solve basic problems so I can’t buy the fact that Mr. Chew switched firms because of this. Why doesn’t Mr. Chew post what his incentive compensation was to switch to Paragon. What was the deal he got? There is no mention of this, but this seems only logical that this conversation of what he would be paid would have been part of his recruitment process.

As far as the last statement the poster made about did Paragon pay for this article, how did RIABiz find out he switched firms? Most RIAs disclose their fee compensation and soft dollar arrangements, why doesn’t RIABiz do this.

I am hoping you don’t delete my comments and maybe just see your response or Mr. Chew’s response.

Joe Rogers

Joe Rogers

August 9, 2012 — 7:16 PM

My email wasn’t listed correctly before I think if you want to email me in your form for a personal response to my points.

Brooke Southall

Brooke Southall

August 9, 2012 — 7:54 PM

Hi Joe,

I don’t know if you’re the same person who wrote the first comment but this one certainly has a tone that suggests a desire for more knowledge rather than a bit of a bashing. Thank you.

I’ll have to check with Lisa on a couple of your industry points.

I can address the RIABiz points. This story, like many we run, came to us in the from of a press release. We then undertook the process of calling calling the subjects, Commonwealth, LPL and various third-party experts. We then laid out the information in away that hopefully a reader can get a reasonable picture of what’s going on. If anyone speaks out of school, typically somebody lets us know in this process.

In the past, we have written about LPL winning advisors, LPL losing advisors, Commonwealth losing advisors, Commonwealth winning advisors, Schwab winning, Schwab losing It runs the gamut. Our goal is to tell all the stories that give the industry an insight into what’s going on at these companies and in the minds of advisors. We never get paid to run stories. I doubt any publication would last very long if it did that.

I hope that helps.

Brooke

Sean Kernan

Sean Kernan

August 10, 2012 — 4:56 PM

If advisors keeping joining Commonwealth, won’t they too become “too big”? Yet, Commonwealth seems willing and able to add advisors. Interesting paradox. Also, I don’t think anyone LPL-affiliated advisor would say there’s anything “wirehouse-like” about it, unless they haven’t been at a wirehouse in a very long time. All that said—different strokes (Commonwealth vs. LPL) for different folks!

Brooke Southall

Brooke Southall

August 10, 2012 — 6:12 PM

Hi Sean,

Some of these same thoughts were going through my mind. One of the great things about the independent business is that it’s still, even LPL, relatively small and intimate. But everyone is striving for growth at the same time. I need to get someone to write a column about how to confront that paradox!

thanks,

Brooke

Lisa Shidler

Lisa Shidler

August 10, 2012 — 6:46 PM

Hey guys, Lots of interesting comments on this issue. The analysts I spoke with said that Commonwealth has managed to keep that “intimate feeling” despite the fact that the firm has grown. But it’s clearly a challenge for all firms.They want to grow but advisors want a more cozy atmosphere. in speaking with Bryan, he really saw the changes over the years at LPL and was seeking that type of culture.


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