Commonwealth Financial Network, a leading independent broker-dealer, said Wednesday that its new stand-alone technology company, Advisor360°, has entered into a licensing agreement with Massachusetts Mutual Life Insurance Co. that will make Commonwealth's suite of software tools available to the insurance company's advisers, who are registered with the broker-dealer MML Investors Services.
The software tools include: a platform that integrates portfolio, trade, contact, document and wealth management in a single area; another platform that serves as a dashboard for streamlined practice-wide operations, work and analytics; and another that allows clients to see their complete financial picture.
Executives at Commonwealth, a privately held firm, routinely discuss the merits of their technology platform and the firm's investment in adviser-focused tech.
"This is a big first for us," said John Rooney, managing principal. "We're allowing MML to piggyback on our software to run a broker-dealer. It captures trading, compliance, all the stuff it takes to run a broker-dealer from a service point of view. We will talk to other broker-dealers [about the software] if there is market interest."
MML is essentially paying a license per seat for their advisers to use the software, he said.
"They are outsourcing a big part of their tech budget with Commonwealth," Mr. Rooney said. "They share the economies of scale, and it also frees up capital" for Commonwealth, he said, noting that the firm is also currently investing in a separately branded RIA for advisers looking to drop their securities licenses.
By leasing the software to MassMutual, Commonwealth also avoids providing a technology upgrade to a direct competitor. MassMutual advisers are typically much lower producers than those at Commonwealth and have a background in insurance sales. Commonwealth's advisers are much more traditional wealth managers and focus on fee-based money and wealth management.
In a press release, Commonwealth's CEO, Wayne Bloom, noted that Commonwealth and MassMutual will maintain their current, separate tech service desks.
"The agreement with MassMutual will enable us to accelerate the pace of our software development" to serve Commonwealth's advisers, Mr. Bloom said, according to the release.
At the end of 2017, Commonwealth Financial Network had 1,778 producing registered reps and advisers with $156 billion of client assets, according to InvestmentNews data. At that same time, MML reported 7,714 reps and advisers with $224.8 billion of assets.