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Commonwealth Financial Network is an independently-owned financial advisory and investment management company. It notably does not specialize in directly assisting investors —rather, it supports independent advisors with its advisory and consulting services, technology platform, investment research and portfolio management. The firm has over $133 billion assets under management (AUM) and approximately 2,600 advisors, among them holders of certifications like the CFP® and CPA.
The bottom line: Investors can access Commonwealth Financial Network’s portfolio management, retirement planning and wealth management consulting through their individual advisors.
|Assets under management : $133,519,406,156|
|Minimum investment: $1,000 and up, depending on the type of account|
|Individual investor to advisor ratio: 125:1|
|Fee structure: A percentage of AUM, hourly charges, fixed fees, commissions|
|Headquarters: 29 Sawyer Road, Waltham, MA 02453
All information included in this profile is accurate as of October 15, 2021. For more information, please consult Commonwealth Financial Network’s website.
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Joe Deitch established the firm as the Cambridge Group in 1979, and it was renamed Commonwealth Financial Network in 1981. Deitch remains with the firm, serving as chairman.
Today, Commonwealth Financial Network is a wholly owned subsidiary of the 1979 Holding Company, LLC, a subsidiary of Gratitude Holdings, Inc. A Deitch family trust owns 25% or more of Gratitude Holdings, Inc.
Commonwealth Financial Network serves both high net worth and non-high net worth individuals, although it works with 19 times the number of non-high net worth individuals. (For reference, the SEC defines a high net worth individual as a person with $750,000 assets managed by an advisor or who has a net worth of at least $1.5 million.) The firm’s next largest client groups are corporations or other businesses.
Commonwealth breaks its investment programs into three suites — Preferred Portfolio Services (PPS) Custom, Select and Direct — and each of which has a different set of investment minimum requirements for the various options within those suites. For instance, the PPS Select Passive Portfolio Fund requires a low minimum of $1,000, but that minimum can go up to $500,000 for the PPS Select Fixed Income SMA Program.
The table below outlines the typical minimum requirement ranges for the three suites:
|Commonwealth Financial Network Investment Minimums|
|PPS Select||$1,000 to $500,000|
|PPS Direct||$25,000 to $250,000|
|PPS Custom||$25,000 to $50,000|
Primarily a support for investment advisors, Commonwealth Financial Network’s services aim to assist financial professionals. Independent financial advisors could take advantage of practice management, marketing, technology, compliance and research services.
As an individual investor, you could benefit from the firm’s investment solutions, advisory and planning services, accessible through your advisor. Services that can be funneled to clients via an advisor include retirement consulting and wealth management.
Here is a full list of the services individuals could get through Commonwealth Financial Network:
Commonwealth Financial Networks offers three investment programs: PPS Custom, PPS Select and PPS Direct. These programs are designed to meet a range of client investment philosophies, needs and objectives. As such, they can use a variety of investment products and approaches, as outlined in the table below:
|Commonwealth Financial Network Investment Advisory Programs|
|Program||Program type, manager and typical investments|
|PPS Custom||Type: Completely customized
Manager: The independent advisor
Typical investments: Stocks, bonds, mutual funds, ETFs, UITs, variable and fixed-indexed annuities and alternative investments
|PPS Select||Type: Model portfolios
Manager: Commonwealth Financial Network
Typical investments: Mutual fund and ETF portfolios, equity portfolios, fixed income portfolios and variable annuity subaccount portfolios
|PPS Direct||Type: Model portfolios based on risk profile
Manager: Commonwealth Financial Network or third parties
Typical investments: There are four subaccount options that offer mutual funds, ETFs, individual equities, fixed income securities and other investments
The firm also offers clients access to third-party asset management programs, which are managed by outside advisors rather than by Commonwealth. These portfolios typically include investments such as stocks, bonds, ETFs, mutual funds and derivatives.
Commonwealth Financial Network may charge several types of fees depending on the service provided and/or the portfolio selected.
For investment advisory services, each portfolio has a specified advisor and program fee that’s based on a percentage of a client’s assets under the firm’s management. Maximum advisor and program fees generally range from 0.75% to 3.00%. In addition, clients may also pay an annual account fee, transaction charges, third-party custodial fees, monthly flat insurance fees, mutual fund or money market 12b-1 fees, sub-transfer agent fees and distributor fees.
Consulting services may be negotiated on an hourly, flat or fixed-fee basis. Commonwealth Financial Network caps hourly fees for wealth management consulting at $500 per hour. Retirement plan consulting fees are also capped at $500 an hour, or at a maximum of 1.50% when stated as a percentage of assets under management.
Commonwealth Financial Network has two disciplinary disclosures on its record. For reference, the SEC requires all registered investment advisors to disclose any civil, regulatory or criminal actions that occurred within the last 10 years that could impact a client’s evaluation of the business or management on their Form ADV filings.
Commonwealth reports the following disclosures, both of which the firm self-reported to the SEC and FINRA, respectively:
For further information, visit the firm’s Investment Adviser Public Disclosure (IAPD) page.
Commonwealth Financial Network does not serve clients directly. As such, your onboarding process as a client will differ depending on your advisor. That being said, the process typically follows four steps:
Commonwealth Financial Network has nearly 1,100 office locations. In its Form ADV filed with the SEC, it lists offices in the following 15 states:
In addition to its physical office locations, Commonwealth Financial Network is registered to serve investors in all 50 states, plus the District of Columbia.
Commonwealth Financial Network focuses on providing services to financial advisors, not to individual investors. An advisor who works with the firm may be right for you if you’d like access to a wide selection of investment strategies and asset allocations. The firm also has low investment minimum requirements for some of its programs, making it accessible to investors without a high net worth.
However, Commonwealth Financial Network may not be right for those who prefer to directly communicate with their money manager, as it mainly works through independent advisors. Would-be clients should also be aware of potential conflicts the firm may have related to its proprietary products.
Before settling on an advisor, it’s important to consider your options and do some research. Our financial advisor tool can help you start your search for an advisor who meets your needs.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.