Commonwealth loses teams to a startup RIA and Cetera

Commonwealth Financial Network lost six wealth management teams to a newly formed RIA on Aug. 31 and, the same day, watched a four-advisor group led by Steven Roth leave for Cetera Financial Group, according to PWD's tracking. The exits arrived from opposite ends of the market—a startup RIA and a large aggregator both found inventory in Commonwealth—and the independent broker-dealer that built its model on recruiting wirehouse teams now supplies both.

The rest of the day's moves—UBS advisors to Frost Investment Services, additions at Merit Financial Advisors, and a new Sowell Management office—showed the same churn across tiers, with established platforms that once absorbed breakaway teams now producing them.

A newly formed RIA brings capital and a pitch in place of a legacy brand or large platform, and six teams leaving an established independent broker-dealer for that pitch suggests the capital is being put to work. Each team brings books of business and client relationships, giving the startup a distribution base in a single stroke—the same math that drove wirehouse breakaways a decade ago, now pointed one level up the channel.

Cetera's move was the mirror image: a large aggregator harvesting production from another independent broker-dealer. The economics are simpler than a wirehouse transition because the advisors already operate under a brokerage model, so the move is less about escaping an employment relationship than about a better split or platform.

For independent broker-dealers, the model that was built to be the destination—advisors leaving the wirehouse to own their books and keep more revenue—is now losing to firms with a cleaner RIA structure and to larger competitors that outbid on transition money and technology. The capital and transition support that once flowed into independent broker-dealers is now being deployed against them by their own recruits and rivals.

One day does not prove a permanent reversal, but the direction is hard to ignore. If six teams can leave Commonwealth, the question for the rest of the independent broker-dealer tier is what they offer that a startup or a consolidator cannot match—and the answer is less clear than the model's promoters have claimed for years.

The next test is whether Commonwealth can stop the bleed or whether the teams that left become a recruiting template. The six teams now inside a startup RIA and the four inside Cetera are likely to be followed by others who see the independent broker-dealer channel as a waystation.