Focus Financial in the zone – does yet another deal

Sapient Private Wealth Management, a fee-based investment adviser based in Eugene, Ore., has joined Focus Financial Partners LLC, marking the eighth transaction completed by Focus this year.

Sapient has emerged as one of the best RIAs in the Pacific Northwest,” said Rudy Adolf, chief executive of Focus Financial, which now manages over $45 billion in assets. “They wanted to become entrepreneurs and fiduciary wealth managers.”

Sapient was founded in September by three former Morgan Stanley Smith Barney LLC brokers — Greg Erwin, Alan Rexius, and King Martin. It was launched with the support of Focus Connections, a consulting service owned by Focus Financial that assists wirehouse teams who want to become independent registered investment advisers.

(How does the Focus deal for Sapient size up against recent deals done by United Capital and other acquirers? Visit the InvestmentNews Deal Tracker for all of the latest notable M&A activity in the financial advisory space.)

The firm successfully retained more than 90% of its clients, (with over $500 million in assets), since the departure from Morgan Stanley.
“In this environment, clients mistrust large financial institutions,” said Greg Erwin, co-founder and managing partner of Sapient. “Our ability to say that decisions are made here on a local basis and not in an ivory tower in New York City is a strong selling point for us.”

The deal was a while in the making. Mr. Erwin said he first had discussions with Focus Financial in the summer of 2008, but the financial crisis forced him and his partners to put their plans on hold. Like most advisers, they spent the next year helping clients deal with the turmoil. Late in 2009, they re-engaged with Focus and struck a deal the following spring for Focus to help set up an independent practice.

“They helped us secure real estate and led us step by step through the process and took the mystery out of it for us,” Mr. Erwin said. While he admits there were some “bumps and bruises” in the transition, it was “so worth it to have control over how we run the firm and spend the money we make.”

The biggest change since leaving the wirehouse? “Our attitudes,” said Mr. Erwin. “We were somewhere between suffocating and sinking in quicksand at the wirehouse. Running our own practice has really lifted out spirits.”