How to sell your firm without really trying

Focus Financial now offers a succession plan that requires no planning; 'retirement insurance'

Nov 14, 2012 @ 4:25 pm

By Liz Skinner

succession planning, focus financial
+ Zoom

Independent advisers who have not planned how they will pass on their business when they retire — or actually die while still running their firm — may now have a backstop.

Adviser aggregator Focus Financial Partners LLC is offering registered investment advisers a flexible succession planning strategy where the owner can set up the deal, but decide later whether to execute it.

“This is like retirement insurance,” said Rudy Adolf, founder and chief executive of Focus Financial. “It's like an option to do a deal.”

The service is aimed at firms managing between $50 million and $300 million in assets, he said.

The process begins with Focus examining how ready a firm is for succession and a transition to new owners. The goal is to have the owners formulate policies and make changes that would make the business more conducive to succession, Mr. Adolf said.

Heavily proprietary technology, for example, would be very difficult for another advisory firm to come in and take over the client portfolios, he said.

Focus Financial, whose firms manage about $52 billion in client assets, isn't charging for this initial diagnostic at this point, even though Mr. Adolf said even this initial step will provide real value to the RIA to prepare for succession.

The advisory firm would then choose a Focus partner and sign an agreement to have them manage their business once the principals decide to activate succession. The financial terms of the deal would be set in that agreement. Annually, firms would have to certify their transition plans were up to date and either side could terminate at any time, Mr. Adolf said.

Buckingham Asset Management, a partner of Focus Financial, signed such an agreement last week with owners of CLM Capital Management LLC in Maine, which until that deal had been one of the 75% of advisory firms without a succession plan.

“We believe we're solving one of the single biggest issues that the industry has,” Mr. Adolf said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

What is your bold prediction for the future of financial services?

What do you think is next for your business and the industry? We asked advisers to tell us where they were heading in the next five to 10 years. One adviser even expects a Super Bowl ad to raise awareness.

Latest news & opinion

Fiduciary advocates press CFP Board for specifics on standards changes

Meanwhile, few brokerages and their trade associations, which blasted the DOL's fiduciary rule in comment letters, are responding to the CFP Board's proposal.

Big gains attract new money to emerging markets, but should investors stay?

An estimated $6.7 billion has flowed into emerging-market stock funds and ETFs so far this year, according to Morningstar.

Attorney blasts Finra after regulator loses insider trading case

Lawyer says it was 'slimy' of Finra to publicize the case while it was still being litigated.

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print