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One of the largest independent broker-dealers is dipping into rival waters to compete for rogue advisors equipped with a new specialty suite.

The Commonwealth Financial Network launched its Business Consulting Services division on January 20 to attract 15 to 20 retired teams this year, said Matt Chisholm, senior vice president of RIA Services and Practice Management.

Competitors like LPL Financial and Kestra Private Wealth Services have launched similar outlier channels in recent years.

Other competitors among RIA platform vendors and consolidators, as well as technology and compliance vendors, are also looking to do business in an ocean that is estimated to have 6,850 consultants who are independent of wirehouses and regional BDs each year.

“They’re all trying to do the same thing,” says business consultant Jennifer Goldman. “We have you in the back office. We have you on the side of human resource management. Now be the advisor you always wanted to be. “

In fact, two companies launched their own specialty services in consecutive days after Commonwealth’s announcement: governance, risk management and compliance firm Foreside Financial Group and tech-savvy trust company Orion Advisor Solutions announced their own new offerings.

According to research firm Cerulli Associates, quoted in a November report by Fidelity Institutional, more than 3,050 consultants leave wirehouses and nearly 3,800 regional BDs leave each year.

The Waltham, Massachusetts-based Commonwealth has had no trouble in the larger wealth management landscape – it is one of nine IBDs with annual sales in excess of $ 1 billion. However, according to Chisholm, the new unit signals a shift between IBDs in “faster moving waters than just traditional movement,” says Chisholm.

A team of six at corporate headquarters will work directly with breakaway teams before and after the move. In addition, Commonwealth will provide services such as human resources, real estate, outsourced chief investment officers, virtual assistants, marketing, compliance, CFO services, succession planning and other management consulting services, according to Chisholm.

The full range of services reflects the breadth of resources that breakaway teams need today, he says.

“The types of advisors we target are likely to be larger,” says Chisholm. “It’s recognizing the complexity of these companies. The biggest challenge these teams face is the indolence and – ‘How do I do this?’ – the fear of the unknown. “

News about the Commonwealth’s breakaway channel was first posted on the ThinkAdvisor website in November when the company discussed the new services at its annual conference.

Chisholm declined to share details of the company’s recruitment offers and compensation, which he believes include a payout model and additional fees for certain services.

According to IBD recruiter Jon Henschen at Henschen & Associates, the payout rate is likely to be between 60% and 75%. According to Henschen, companies typically offer outlier transition assistance on two levels, which means an upfront bonus before the move and another six or more months after, based on customer and asset retention.

“Wirehouse workers tend to be interested in branding names,” he says. “It’s like an exclusive country club to join this company. They have a pretty rigorous screening process. “

The Commonwealth had traditionally focused on recruiting its IBD rivals, so Henschen and his colleague Jodie Papike from Cross-Search agreed. Working from home during the pandemic feeds the continuing trend of advisors towards independence, Papike says.

“They go to a turnkey place and everything is set up for them and they really don’t have to think,” she says. “I’ve spoken to several consultants [who were open to] the idea of ​​being alone and maybe not needing the infrastructure. Do I really have to give away so much of my compensation for these things that I could put them together myself? “

Compliance consultancy MarketCounsel is a “big advocate” of consultants running a full RIA, according to General Manager Ryan Marcus. However, he notes that IBDs like Commonwealth, with their breakaway channels, could add margin and retention.

“Independent broker-dealers no longer want to be so slow on the road to independence,” says Marcus. “It’s smart for them because they want to reduce the chance for a consultant to eventually say, ‘Something is missing here.'”

Commonwealth strives to serve complete RIA advisors by providing a “Quick Start Guide” and other services designed to provide what Chisholm calls a glide path to ensure advisors move at varying speeds and phases during their transitions can.

“We think that some of the decisions are getting fixed early because we can do all of this in-house,” he says, noting that some issues can be more easily resolved later. “Put them on and then we’ll get at the pace that makes sense for you and your customers.”