December 6, 2022
Louis Diamond Quoted
by Brooke Southall and Oisin Breen
Fresh off three-year hiatus, Wayne Bloom framed his Waltham, Mass. IBD as both a big, national RIA and a custodian to smaller ones but also promises to ‘remember where you come from’ — namely a commission-based brokerage beginning.
Wayne Bloom set a $1 trillion AUA goal in RIA custody by cutting the RIA custody fee, using Fidelity and Schwab as custody partners and proudly wearing his broker-dealer (IBD) beginnings.
It’s a “brilliant” move, but, it’s also risky, because Commonwealth’s leasing out the very USP that’s given it an edge in recruiting and retaining advisors, counters Louis Diamond, principal of NYC consultancy Diamond Consultants.
“There’s a risk, and I’m sure they’ve thought about it; that they begin to cannibalize their business. All of sudden, you’re creating some pretty viable and well capitalized competitors,” he explains.
“That’s the No. 1 concern, but I’m sure [Commonwealth’s] done a cost-benefit analysis on the amount of money they can make selling this technology … [versus] creating new competitors in the market,” he said.
