- What is Commonwealth Financial Network®?
- Brokerage firms with mainstream advertising like Merrill Lynch or Edward Jones or Morgan Stanley have storefront offices and are retail operations. These firms offer “in-house” proprietary investment products, and advisors working there are often offered incentives to place their clients in those products.
- Commonwealth Financial Network is different. It is independent and privately owned. This means that we have the freedom to choose among a full range of investment products, which we feel is critical.
- While awareness of Commonwealth by the general public is low, among the financial community, it is well known and highly regarded.
- Commonwealth has a long history and substantial size. It was founded in 1979 as an independent broker/dealer with its headquarters in Waltham, Massachusetts, and has more than 800 employees working with more than 2,000 advisors who collectively manage more than $100 billion in assets.
- What are your account criteria?
- You should believe in the power of investing using asset allocation, rebalancing, and specialized money managers for each asset class. If you are unfamiliar with these concepts, we will take the time to explain them to you. We don’t market-time, day-trade, or panic-sell. We will invest with you for the long term.
- In terms of size, the only criteria established by Commonwealth is an account minimum of $1,000. Our range at the upper end is closer to $10 million.
- You have to be nice. I think you will agree that life is too short to work with difficult people.
- What are your fees and commissions?
- We believe in transparency. All fees and commissions will be clearly explained.
- We have two basic fee structures—one for creating financial plans and another for managing investment accounts.
- For creating a financial plan, we will determine a flat fee based on the complexity of your situation and the amount of time it will take to complete the task. It is all-inclusive and covers all revisions.
- For managing investment accounts, our focus is a graduated fee-based, "assets-under-management" approach whenever possible. For accounts up to $35,000, our fee is 1.1 percent of the account value. For accounts between $35,000 and $3 million, the fee is 0.85 percent. For accounts over $3 million, the fee is 0.65 percent. Accounts over $5 million are charged 0.5 percent. These annual fees are deducted proportionately each quarter and are all-inclusive—no extra charges for trades, reports, electronic fund transfers, and so on. For example, a $1 million account would have a yearly fee of $8,500. If there is a situation where it is more beneficial for you to have a commission-based account, then that is what we will recommend. For example, if an account holds only bonds, it may be less expensive to charge a commission on the infrequent trades to buy or sell bonds than a yearly fee. Please refer to our Form ADV Part 2 for specifics.
- Commissions do apply to products like insurance, certain variable annuities, real estate, or other direct participation programs (e.g., oil/gas). Whenever and wherever possible, we work to have investments in a fee-based structure.
- Isn’t my stockbroker a financial planner?
- We get asked this a lot. And the short answer is probably not. A stockbroker focuses on investments in stocks and bonds and, at some firms, primarily on the U.S. markets. As a financial planner who handles investments, we have a more holistic view of your situation, taking into account long-term goals and objectives, insurance needs, and your retirement situation, which allows us to then develop the appropriate strategy with tailored solutions.
- How do you work with my other advisors like my estate attorney and accountant?
- One of our roles is to coordinate the efforts of all your advisors so that everyone is on the same page. This saves a lot of time, effort, and money. They welcome our involvement because of our "big-picture" knowledge of your situation and our ability to handle certain tasks for them to get things done. For example, during tax season, we help accountants get the information they need to finish your tax returns on time!
- What about insurance? Is that part of financial planning? What can you help me with?
- Yes, it is, and, yes, we can.
- We are licensed and have expertise in life, disability, and long-term care coverage. Our affiliation with Commonwealth provides us with access to its staff of specialists in each of these areas.
- Can you help with social security and Medicare?
- Yes! This is often a critical component of retirement planning and determining the appropriate claiming strategy for benefits can be worth hundreds of thousands of dollars over your retirement years. We use the most sophisticated software program available to handle all the analysis of social security benefits and help educate clients on Medicare issues.
- What about helping our children?
- We help children, parents, and siblings on a complimentary basis to answer any financial questions they might have. If they decide to have us work on a financial plan or manage their investments, that would be a separate financial arrangement.
- Can you help with education funding?
- Planning for a college education is critical to do from the day your child is born. We will help with funding strategies (like 529 plans), financial aid, and student debt issues.
- Do you work with clients outside of the Chicago area?
- Absolutely. We work with folks across the country in California, Vermont, Massachusetts, Florida, Arizona, and Montana. We usually meet with everyone in person every year and have robust communication via phone and email.
- Will you provide references?