Registered Rep.: Why would a wirehouse rep want to leave his firm and join yours?
Joe Deitch: At Commonwealth, an experienced advisor can have the best of all worlds. Total independence coupled with enhanced overall service, freedom from proprietary products and quotas, higher compensation and better technology.
RR: Other than your own, of course, which other independent broker/dealers are you impressed with and why?
JD: We place a premium on personal integrity, intellectual honesty and dependable services. Most of our major competitors have some combination of these qualities in varying degrees.
RR: Least favorite compliance rule?
JD: Any one made retroactively.
RR: Are your affiliated advisors fee-based or mostly commission/transaction advisors? Quantify.
JD: The majority of our advisors do a combination of both fee- and commission-based business. Our total firm revenues are 53 percent fee-based, which continues to grow.
RR: How many of your reps are dually registered? Is that number growing or not?
JD: The majority of Commonwealth’s advisors are affiliated with either Commonwealth’s RIA or an outside RIA. About one quarter are dually registered, and that percentage has been relatively stable over the past few years.
RR: The most expensive aspect of running your independent broker/dealer firm in 2007?
JD: By far, our biggest investment is in our people, with an unusually supportive rep-to-staff ratio of approximately 3:1. Our service level is our competitive advantage.
RR: Your recruiting goals through 2008 and onward?
JD: Generally speaking, we enjoy welcoming 100 or so new advisors each year.
RR: What are you thoughts on the upfront bonuses?
JD: Like other firms, we have the option of granting all manner of assistance; however, more upfront simply means less elsewhere. The more important question for both the brokerage firm and the advisor is how—and where—is the money better spent?
RR: The ideal advisor is? (Three words or less.)
JD: Motivated, demanding, respectful.
RR: Biggest challenge in 2008 for the independent channel and your firm?
JD: Reacting to the unforeseen and uncontrollable developments (e.g., regulatory pressures, political whimsy) that are the most frustrating.
RR: The best technology investment your firm has made?
JD: Client360°®, the foundation of our fully hosted and integrated web-based operating environment for our advisors.
RR: Best advice you can give a wirehouse rep who is thinking about going independent?
JD: The transition period lasts for three months, while the benefits can last a lifetime. That said, you can only choose one firm—so do your research thoroughly.
RR: What are the challenges you will face over the next five years?
JD: Not becoming complacent.
If you could meet one business-related figure, dead or alive, who would it be and what would you ask?
JD: Steve Jobs. I have personally learned the most from others by simply spending time with them and coming to understand “the measure of the man” as it were.
RR: In 10 years, your firm will be?
JD: We strive to be better. That has been our guiding principle from the beginning—and I see no reason to change it now.
RR: A book every financial advisor should read:
JD: Any book that helps the person to become more self-aware.