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

Pershing's Hempel: Investing opportunity in regulatory evolution

Amid the regulatory chaos, there are investment options that will become more attractive for investors. Joel Hempel of Pershing explains some new choices.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

CFPs, including brokers, may have to adhere to a stricter fiduciary duty

CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

CFP Board's proposal to expand fiduciary duty draws praise, carries risks

Some question whether brokers will drop the CFP mark or if the CFP Board will strictly enforce its new standard.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print