What's up with J.D. Power naming Commonwealth top IBD for the fourth straight year

Brooke’s Note: When the press release came in, I bit. How in heck does an IBD win top honors four years in a row? I really wanted to know. After talking to Commonwealth chief Wayne Bloom, it began to make some sense. Commonwealth ruthlessly subjects itself to third-party criticism as a daily exercise so by the time the pollsters show up, virtually all the objections have been removed. Spend enough time in a frying pan and the fire is no trouble.

For the fourth time running, Commonwealth Financial Network has been ranked highest in independent advisor satisfaction among financial investment firms by marketing company J.D. Power and Associates.

The Waltham, Mass.-based independent broker-dealer, with 1,600 reps and a combined $97 billion of advised assets, earned its highest-ever overall satisfaction score of 954 on a 1,000-point scale, compared with an industry average of 778, and outpaced the next-highest ranked independent advisor,
Cambridge Investment Research Inc., of Fairfield, Iowa, by 41 points.

Raymond James Financial Services Inc., based in St. Petersburg, Fla., placed third with 899 points and Boston-, Charlotte, N.C.- and San Diego-based broker-dealer LPL Financial made the top seven with 755 points in that category. See: Cambridge, Commonwealth see reverse breakaways due to compliance fears.

As a B-D, a fabulous RIA

Reached on Cape Cod, vacationing Commonwealth chief executive Wayne Bloom offered some rote commonplaces about what his company does right. When pressed by a reporter, he put it in these terms:

“We’re a broker-dealer but we’re really a great big RIA — with 70% of our assets fee-based. We take service to the nth degree. People just care. Everybody just gets it at Commonwealth.” See: How one IBD rep just zoomed to $1 billion AUM — on his way to $2 billion — but remains impervious to calls from RIA custodians.

Commonwealth is king, with Cambridge, Raymond
James also scoring well.

Constant comments

Advisor feedback and criticism, encouraged by click-through tabs on Commonwealth websites, is one explanation for the firm’s stellar score, according to Bloom. No critique or comment no matter how superfluous it may seem, he says, adding that Commonwealth advisors tend to comment more freely because of the feedback they receive.

Westlake Village, Calif.based J.D. Power conducted 30 to 40-minute interviews with numerous advisors, Bloom says.

“It’s pretty intense.”

High (data) point

J.D. Power does not charge broker-dealers to conduct and publish its ratings, instead charging the winners a fee to license the right to advertise those rankings.

Commonwealth has paid these license fees in the past and finds that it makes a favorable impression on prospects.

“It’s another data point,” Bloom says. “No one thing sets you apart but this annual polling means more than any other. Everybody knows J.D. Power.”

'Humbling’

The J.D. Power study that accompanied the rankings, “J.D. Power 2014 U.S. Financial Advisor Satisfaction,” canvasses more than 3,900 financial advisors and was conducted between January and April.

Commonwealth achieved the highest score in all seven key drivers of advisor satisfaction—advisor/professional support, client/customer-facing support, compensation, firm leadership, operational support, problem resolution, and technology support. See: Commonwealth’s revamp of technology includes subtracting Advent.

“To be the highest-ranked firm in the independent channel four consecutive times is truly humbling and remarkably gratifying,” said Bloom in a statement. See: J.D. Power and Associates hints strongly at wirehouse deficiencies as it puts Commonwealth Financial and Raymond James on a pedestal.