US Aggregator Earmarks UK to Test Model

Matthew Smith

26 March 2007

US wealth management aggregator, Focus Financial Partners, will look to the UK market for new acquisition opportunities, said CEO Ruediger Adolf, following the group’s purchase of its 10th Registered Investment Advisory practice in America. Focus Financial announced the purchase of a California-based investment advisory practice with $2 billion in client assets to WealthBriefing, which brought the network’s total client assets to $17 billion, according to Mr Adolf. He said it was too early to disclose the name of the latest firm to be acquired by the group under the aggregator model that uses a combination of script and debt financing to purchase advice businesses and aggregate them into a national network. In January, Focus Financial announced it had acquired three wealth practices, which combined brought $10 billion in client assets to the group. The practices included Missouri based Buckingham Family of Financial Services, Sentinel Benefits Group based in Massachusetts and Quantum Capital Management in California. Mr Adolf said he hoped soon to take the Focus Financial model internationally. “We believe this is a global model. While we don’t have to make this business international at the moment because the opportunity in the US is still very large, I have my feelers in the UK market ,” he said. Focus Financial has grown quickly with the backing of $9 billion Private Equity Firm Summit Partners, which it struck a financing deal with in February last year worth $35 million of equity to invest for growth. Mr Adolf claimed to have the only fiduciary wealth management firm with a true national scale in the US with a presence in 41 states. He said the majority of wealth under advice in the US resides with large broker-dealers that don’t have a fiduciary obligation to their clients. “That’s why I think the RIA model is a powerful model, because it’s a fiduciary model where advisors have an obligation to clients to find the best solution to meet their financial needs.”