Focus Financial Partners, the buyer of advisory firms led by CEO Rudy Adolf, has entered the business of providing consulting help to brokers looking to leave wirehouses and form RIA firms. The first team to take advantage of the “Connections” service is LLBH Group Private Wealth Management in Westport, Connecticut, whose four partners left Merrill Lynch to found their $1 billion in AUM RIA firm in October 2008. Among the “concierge” services offered by Focus to such teams is providing an interim COO to get the firms up and running; once established as independent firms, they can use other resources at Focus, including marketing and HR support, and access to capital.
Jim Pratt-Heaney, who holds the CIMA designation and is an LLBH co-founder and partner in charge of investing, said that when he and his partners decided to go independent, “we chose Focus because, number one, we’re aligned in how we treat clients.”
Adolf added that one benefit to partner firms comes in the leverage that Focus, “one of the largest clients of all the custodians,” can bring to bear in negotiations, so firms “are not starting at the list price.”
While Adolf was a bit vague on how the transaction was structured, saying Focus would share in LLBH’s success as it grew and would become an eventual full-fledged partner firm, Pratt-Heaney is already quite pleased. “Looking at independence we saw that we could have better technology, better reporting, a wider range of investment vehicles. With Focus, when we met the partners in their group, it reflected what we do–they’re fee based, they worry about clients the way we do.” Pratt-Heaney said the deal with Focus took a year, and it could have been faster, “but we did a lot of due diligence because it’s a big step.”–James J. Green