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New Focus CEO Outlines Big Changes
The giant acquirer ’ s acquisition strategy will change , and its firms will share more services .
By Jacqueline Sergeant and Evan Simonoff
FOR THE LAST DECADE , ADVISORS HAVE been wondering when RIA aggregators would start to integrate the dozens of legacy firms in their networks . Last month , Financial Advisor put that question to the new chief executive of Focus Financial , which did that very thing last month — announcing it would merge two high-profile firms — the Colony Group and Buckingham Strategic Wealth .
In an interview in early May , Focus ’ s new CEO , Michael Nathanson , acknowledged that he and Buckingham CEO Adam Birenbaum were hardly alone among Focus firms when it comes to discussing possible business combinations . Over the years , he , Birenbaum and executives at other RIAs in Focus ’ s 90-firm stable , have held long conversations about numerous subjects at company events , ranging from best practices in asset management to tax planning to succession planning and a host of other topics , that sometimes wandered into the idea of possible mergers .
But if the advisors at the current Focus firms want to merge their businesses , it would have to be what Nathanson calls a “ coalition of the willing .” Focus , he said , is “ not forcing anyone to do anything , nor could we .” Apparently , the agreements Focus has with its partner firms say it can ’ t .
Nonetheless , when other firms within the network see two of its largest and most successful member firms merge , it sends a strong signal , Nathanson acknowledged . “ This was a voluntary decision by two huge firms ; they did it because they thought it was best for all the stakeholders .” He added that he fully expects some firms to follow suit while others decide they want to remain as they are .
Buckingham and Colony are among the “ hubs ” Focus has created to accommodate merged partner firms . Others include Kovitz Investment Group and SCS Financial . “ So what we are doing now is taking the best of all capabilities of the hubs and we expect to be able to provide those capabilities on a shared services platform to all of our partner firms within Focus ,” Nathanson explained .
A few partnerships have taken place so far this year . In March , Colony was also involved in another merger with Wellesley , Mass . -based GW & Wade , which created GW & Wade at the Colony Group , a firm with $ 31 billion in assets . And in April , it was announced that Kovitz will absorb Deerfield , Ill . -based Strategic Wealth Partners , which will create a $ 14.5 billion AUM firm upon the deal ’ s closing in the second quarter .
The partnerships strengthen various services , which can then be offered to clients across the shared platforms , Nathanson said , noting that many other firms within Focus have skills and specializations that could benefit partner firms .
He noted that Buckingham is a leader in evidence-based investing , which will help Colony ’ s passive investing strengths . Conversely , Colony ’ s active investing and its efforts in alterna-
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