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Focus Financial and Orion Form Joint Venture

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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.

Advisors working with Orion have about $1.4 trillion in assets under administration, according to CEO Eric Clarke. Also, there are some $47 billion of assets under management on its turnkey asset management platform after its recent merger with Brinker Capital.

Advisors using the Orion platform also will have access to a service team to guide both advisors and their clients through the entire lending and deposit life cycle in cooperation with partners bound by strict and well-regulated privacy and data security standards, the firms said.

More Program Details

Orion expects the joint venture will include a robust, end-to-end experience for advisors and clients. Once the joint venture’s services are fully integrated into the Orion platform, advisors will be able to connect a client’s cash deposits and loans to their financial plans through Orion Planning.

“Ultimately, advisors will be able to monitor and report on a client’s entire financial portfolio through Orion’s dynamic reporting capabilities,” the companies said in the announcement.

“By using innovative technology to connect clients’ cash and credit needs with their planning and investment management experiences, this joint venture will have a game-changing impact on an advisor’s ability to serve and retain clients,” according to the two firms.

‘Everybody Wins’

Orion will make these capabilities and solutions available to all its advisor clients, including those who compete with Focus Financial, Clarke stated.

That’s fine with Focus, Adolf said, explaining: “As much as Eric’s clients will be able to benefit from the scale and the expertise that we have built … it’s going to help Focus increase our scale in this particular area, which then results in attracting even more banks and more providers to this marketplace that provides their highly competitive and attractive solutions to our sophisticated set of clients. So, in many ways, everybody wins.”

About 50-75 advisory firms will have access to the services through the Orion platform in a beta program starting at the end of the first quarter. A full release is planned for the second quarter, when all advisors using the Orion platform will be able to access the capabilities, Clarke explained.

— Check out Orion Boosts Efforts to Woo Breakaway Advisors on ThinkAdvisor.

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