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Industry Spotlight > RIAs

Catching up with...Deb McWhinney

By James J. Green

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After nearly a year’s absence from the RIA community she knows–and loves–so well, former Schwab Institutional president Debbie McWhinney has resurfaced, landing a high-profile position at a firm that likes the advisor community enough to put its money where its mouth is. On May 8, Focus Financial Partners, the rollup firm founded and headed by Rudy Adolf that has acquired 15 “partner firms” in just two years, announced that McWhinney had joined its now five-member board of directors. Ever the optimist for the RIA industry, in an interview with Editorial Director Jamie Green, McWhinney noted that “this industry is on fire,” and explained why she chose to affiliate with Focus Financial, which now has five members on its board, including founder and CEO Rudy Adolf. At the same time that the firm was bolstered by RIA expert McWhinney, Focus added another new member, Bill Campbell, a marketing and branding expert and previous chairman of BankOne Card Services and Chase Card Services.

What made you decide on Focus?

As I looked at all the rollup models, I believe Focus comes the closest to providing what I call 2+2=6; which is where you take the best of the RIA industry, leverage it with shared knowledge and good expertise at the company level, and create a growth opportunity for the industry, particularly for the players within Focus.

The issue here is that this industry is on fire, but there are a lot of firms out there, and it’s harder and harder to generate new clients, because the average person is still confused. The RIA industry in general is figuring it out, but Focus is about making it easier for firms to grow, making it easier for them to find succession plans, and making it easier for them to figure out how to continue with their operating leverage. Then, ultimately, it’s about having the partners–which is what all the RIAs would be–to leverage each other in a successful company.

That’s the challenge and the wonderful thing about RIAs, isn’t it? That you’re independent and you can serve clients the way you want, but that you’re independent, which means your own resources are limited in terms of talents and staff and technology.

That’s true. With all the research that’s been done on the RIA industry, the number one reason investors choose an RIA is not the results they achieve, it’s the relationship they bring, and the expertise they offer in terms of the customization of the solution. So if you backtrack and say, what can you get from participating in a firm like Focus: you can get expertise on how to do business development, on human resources policies, on accounting and controls. All those things won’t differentiate you in the marketplace or help you serve your clients, but they are necessary parts of the business. If you focus on where you want scaleability, it’s on those operating parts of your business where you need best practices; where you don’t need to be reinventing the wheel.

There are different rollup firms that would be eager to have you sit on their board. Why this one?

It’s the pure play. Rudy (Adolf)’s focus is on the RIA industry, and won’t be distracted by banking or other avenues you could go down. That’s powerful, because the train’s left the station. The RIA industry is where the wealth is moving. There will be lots of winners in the RIA industry. Focus brings focus; they’re building in an interesting way domestically and internationally [the firm acquired a U.K.-based advisory firm, Greystone Financial Services Ltd., earlier this year]. They’re going to keep their central organization lean and mean. This is about the partners and about the industry and how everybody builds for the future and capitalizes on the opportunity in front of them.

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