Focus bolsters recruiting

Hiring to target big wirehouse teams looking to go independent

Apr 14, 2013 @ 8:31 am

By Andrew Osterland

Focus Financial Partners LLC is stepping up the competition for breakaway wirehouse brokers.

The largest aggregation of wealth management firms in the industry announced five new executive hires intended to improve its Focus Connections offering, which is aimed at recruiting wirehouse financial advisers to the independent channel.

Mark Hovanic, who worked as a complex and branch manager for Morgan Stanley Smith Barney LLC and UBS Wealth Management, will spearhead recruiting from the wirehouses, while managing director Richard Gill will continue to manage the overall Focus Connections program.

LUMINOUS CAPITAL

Matt Sonnen, the former chief operating officer of Luminous Capital LLC, will help breakaway brokers set up and improve their practices.

Luminous, started by former Merrill Lynch & Co. Inc. advisers David Hou and Mark Sear, may be the most successful example of breakaway brokers entering the independent registered investment adviser channel. Launched in 2008, Luminous' assets under management roughly tripled to $6 billion before it sold itself to First Republic Bank last year.

“With Mark and Matt on board, we're expanding the Focus Connections program,” said Focus Financial chief executive Rudy Adolf. “To make these experts available to our breakaway teams is a tremendous opportunity.”

Focus is targeting the largest, most sophisticated wirehouse teams looking to go independent, Mr. Adolf said.

Examples include a team led by former Merrill Lynch adviser John Beirne — managing about $2 billion — that joined Focus last year, and Sapient Private Wealth Management, a team of three Morgan Stanley Smith Barney advisers managing $600 million that joined the firm late in 2011.

The firm intends to maintain and possibly increase its pace of recruitment from the wirehouses, Mr. Adolf said.

The executive hires signal an increase in competition between RIA aggregating firms such as Focus, Dynasty Financial Partners LLC and HighTower Advisors LLC. All three firms are trying to lure wirehouse advisers looking to make the move off Wall Street.

Mr. Adolf, however, suggested that the Focus business model is very different from that of HighTower, which traditionally has purchased wirehouse advisers' practices and provided all the infrastructure needed to run their businesses, for a smaller cut of the advisers' revenue than the Wall Street firms would take.

“We either invest in entrepreneurs or we create them,” he said. “That's very different from going to another employee model like at HighTower.”

HighTower recently launched alternative business models offering advisers a more independent relationship with the firm.

Focus partner firms manage more than $60 billion in assets.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Perspectives from a NextGen adviser

Male advisers still outnumber female advisers 4 to 1. Allei Holway of AXA talks about why becoming an adviser appealed to her and why more millennials are a good fit for this industry.

Latest news & opinion

Is LPL's deal sweet enough for NPH's 3,200 reps and advisers?

They will have to decide if the signing package they are being offered by LPL makes sense. A lot is hanging in the balance.

Eduardo Repetto to leave Dimensional Fund Advisors

Gerald O'Reilly, currently co-CIO, will take over as co-CEO with David Butler.

Alternative strategies boomed after crisis, but haven't been tested

Because the S&P 500 has outperformed, convincing clients they need protection is a hard sell.

7 ways advisers fixed clients' biggest financial dilemmas

Sometimes it takes creativity, along with knowledge and outside help, to get a client out of a jam.

LPL Financial buys NPH, a broker-dealer network with 3,200 advisers

The deal, part of which is based on the advisers and revenue that eventually will move from NPH, could potentially cost LPL $448 million.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print