Summit Wealth exits Commonwealth prior to LPL buyout to become RIA

Summit Wealth Group, a Colorado-headquartered firm that advises $2.1 billion in client assets, has decided to become an independent RIA following its departure from Commonwealth Financial Network. The move marks a transition away from the independent broker-dealer model from Summit, which has picked SEI as its first custodian partner.

“We felt [the RIA model] would be, from a fiduciary standpoint, a better place for us to be moving forward and gave us better fee transparency,” said Summit Wealth Group CEO Randy Morris.

“It gives us the ability for us to create systems, processes and purchase technologies that really fit our needs as an organization, and not what everybody else that were part of the independent broker dealer network was looking for.”

Morris said Summit decided three months ago to move independent, and the firm received SEC approval to become an RIA on March 27, a few days before Commonwealth announced its $2.7 billion sale to independent broker-dealer giant, LPL. The Summit team had been with Commonwealth for over 20 years and spans 41 shareholders and 23 advisors overseeing assets from 3,500 clients, according to Morris.

“We did not know about it beforehand. Did not have a crystal ball,” Morris says of his decision to leave Commonwealth before LPL’s acquisition. “In many ways, it [Commonwealth’s sale to LPL] confirmed our decision. We’re actually very fortunate, I believe, to have made that decision when we did.”

Summit uses the Orion-owned RedTail as its CRM and plans to become multi-custodian to hold assets beyond SEI, which announced multi-custody integration in March. “We really have everything but financial planning and CRM capabilities. It's a true business technology platform. But if there's components that don't fit certain needs, you can plug in those capabilities,” said Gabe Garcia, SEI’s head of RIA client experience.

Morris also said that “the majority of our business is RIA business. We have maybe 5% of our business in what we call FINRA business.” His firm plans to grow through M&A, targeting additions with at least $100 million in assets.

Savvy Wealth is another RIA seeking to recruit Commonwealth advisors into the independent route. Broker dealers such as Ameriprise, Raymond James, Kestra and Cetera are also courting Commonwealth advisors who might opt against staying at LPL.

“I think that most Commonwealth advisors are weighing all their options right now. I think for those who are content to be on the independent broker dealer side, they're weighing the option to sign on with LPL for the long term,” Morris said. “I think that others are considering the options out there in the independent broker dealer space beyond LPL. And I think there's a third group which is really considering what we're doing, which is, how do we stand up our RIA? How do we become more independent and more in charge and in control of our future?”