Savvy Attracts Trio of Commonwealth Teams as LPL Strives for 90% Retention

Savvy Secures Key Commonwealth Partnerships, Boosting LPL’s Investor Confidence in Retention Targets

Imagine if your favorite sports team suddenly got a new coach—some players might stick around, but others could switch teams if they think they’ll have a better shot at winning. That’s what’s happening in the world of financial advisors right now.

What’s Going On?

Three big teams from Commonwealth Financial Network, who together manage nearly $400 million, are leaving for Savvy Advisors. This is happening right after LPL Financial bought Commonwealth for $2.7 billion. Savvy Advisors is growing fast, now with over 100 wealth managers on their team.

Why Should Investors Care?

Whenever advisors move to new firms, it can shake up how money is managed. It may affect which investments are chosen, what technology is used, and even the fees you pay. Investors who work with these advisors, or who own shares in the companies involved, could see changes in their portfolios or in the value of related stocks.

The Bull Case: Why This Could Be Good

  • Better Service: Some advisors say they’re moving so they can use better technology and give clients more choices. For example, Savvy Advisors uses both Fidelity and Schwab, two big names in the industry.
  • Fresh Start: Advisors like Edward Wildermuth say the move lets them “chart their own career path,” which could lead to happier, more motivated advisors.
  • Competitive Offers: Rival firms are offering higher pay and more flexible technology, which could attract top talent and improve service for clients.

The Bear Case: Why This Could Be Risky

  • Uncertainty: When teams move, clients might worry about how their money will be handled or if their favorite advisor will stay.
  • Integration Problems: LPL wants to keep 90% of Commonwealth’s advisors, but about 250 have already left for other companies, according to AdvizorPro.
  • Market Impact: Large shifts like this can cause short-term confusion or disruptions, especially if advisors take lots of clients with them.
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How Big Is This Trend?

Advisor movement isn’t new, but it’s picking up speed. In 2023, more than 9,000 financial advisors switched firms, the highest number in over a decade, according to Cerulli Associates. This shows that competition among wealth management firms is getting tougher, and investors should pay attention to where their advisors are going.

What Does It Mean for the Sector?

The wealth management world is changing fast. Big deals like LPL buying Commonwealth can lead to more competition, better technology, and sometimes lower costs for investors. But they can also bring uncertainty as teams and clients get used to new systems and rules.

Investor Takeaway

  • Ask Questions: If your advisor’s firm is involved in a merger or acquisition, check how it might affect your investments and fees.
  • Watch for Changes: Big moves in the industry can lead to new opportunities, but also new risks. Stay informed about where your money is and who’s managing it.
  • Review Your Portfolio: Use this time to make sure your investments still match your goals, especially if your advisor has switched firms.
  • Look for Stability: Firms with strong technology and support may offer better long-term service, even during big changes.
  • Stay Flexible: The financial world is always changing, so be ready to adapt if your advisor or firm makes a move.

For the full original report, see Yahoo Finance

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