Focus Financial Partners and Orion Advisor Solutions have formed a joint venture that’s set to add a range of cash and credit solutions to Orion’s WealthTech platform, the two firms said Wednesday.
It builds on a relationship that Focus Client Solutions, a subsidiary of RIA aggregator Focus Financial Partners, has developed with a group of banks and nonbank lenders working with its 71 partner RIA firms, which manage over $200 billion in client assets.
The news is significant as an industry development, since “it’s about tying banking to advisors, and it’s long overdue,” said Joel Bruckenstein, head of Technology Tools for Today.
“Everybody in the industry talks about margin compression and the future of the business,” Bruckenstein explained. “This solves for it. It’s another way for advisors [and firms] to make money, and … it builds on their existing client relationships.”
There’s a competitive advantage for advisory firms that loan investor clients money, he points out. “Then integrating this [information] fully and seamlessly into financial planning software — putting all that data into advisors’ hands — also is a big deal.”
How the Program Got Started
Focus Client Solutions was “originally created only for Focus partners a little over a year ago,” according to Focus Financial Chairman and CEO Rudy Adolf. It’s a “tried and tested program.”
The offering gives RIAs the ability to “truly provide holistic advice” for ultra-high-net-worth and high-net-worth clients “to really manage their total balance sheet in a highly sophisticated way,” he explained. Plus, the value-added capabilities tend to be “way superior [to] what a traditional private bank or a wirehouse could offer.”
For the roughly 30,000 advisors with some 2,400 firms using Orion’s platform, the deal means access to lending and cash management capabilities, such as various FDIC-insured deposit programs at competitive rates for clients’ portfolio cash and held-away cash balances.
Lending options include securities-backed and insurance premium finance lines of credit, commercial and business loans, residential and commercial mortgages, and air and watercraft financing.