Focus Financial Partners, the NASDAQ-listed, New York-based partnership of independent, fiduciary wealth management firms that has been growing rapidly since it was founded in 2004, is to add another outpost in the UK, with the addition of a Knutsford, Cheshire-based advisory firm to its new, Connectus-branded stable.
Focus already has a footprint in the UK market, consisting of London-based Skeet Kaye Hopkins, which merged in 2019 into Gelfand, Rennert & Feldman, a multi-family and business office manager (and Focus Financial partner firm) in Los Angeles, California; and Altrincham-based Greystone Financial Services Ltd.
In a statement released today, Focus said it had "entered into a definitive agreement" under which the Knutsford firm, Watterson Financial Planning Ltd, would be acquired by its Connectus Wealth advisory member entity, and added that the transaction was expected to close in the first quarter of this year.
As reported here last month, Connectus is described by Focus as "a consortium" firm. By this it means that Connectus is designed for "founders and teams" of wealth management companies, who are keen to "continue managing their client relationships and maintaining their boutique cultures while gaining the operational efficiencies of shared services."
The Connectus model is seen as expanding and complementing Focus Financial's existing acquisition model, which is to acquire independent wealth management firms as Focus partner firms, or acquire them as tuck-ins on behalf of the partner firms.
"As a consortium, Connectus offers integrated technology, investment support and centralized services, including compliance, accounting and talent management," Focus Financial explained last month.
Today it added that Connectus's "client-centric advisers" seek to provide "comprehensive wealth management advice, through access to expanded services, shared resources and best practices", exemplifying "the spirit of partnership and collaboration, yet celebrat[ing] the entrepreneurial mind-set of its advisers".
Back in the States, advisory industry experts and commentators have been intrigued by the development of the Connectus branding at Focus Financial, to judge by recent media reports there, with RIA Biz, one of the U.S. advisory industry trade publications, referring to it last month as Focus Financial's new "house-brand RIA" (Registered Investment Adviser, a U.S. qualification).
The RIA Biz article noted that while the introduction of the alternative, acquisition-based business model to Focus Financial's long-established, less-controlling business format has proven popular with investors recently – as measured by a spike in the Focus Financial share price on Dec. 22 – it went on to suggest that the company could find it a bit tricky to have both models under the same corporate roof.
Focus Financial officials replied that having the two business models merely enabled firms that were considering joining the Focus partnership to choose the format that they felt the most comfortable with.
In today's Focus announcement, Watterson Financial Planning is described as providing investment management and "holistic financial planning, including retirement, inheritance, tax and insurance planning, to high-net-worth individuals and corporate clients located throughout the UK".
It says the company's "goals-based approach to wealth management" had enabled it to develop a "loyal client base" as well as a "recognizable brand in the UK market".
The company targets British clients, and there was no mention by Focus today of any plans to go after the American expatriate market.
The company is headed up by Craig Watterson, who, in a profile on the company's website, says he founded the company in 2016 after entering the advisory business in 2001 to join his brother, George, who is in charge of operations and business development at Watterson Financial.
'Connectus's first UK outpost'
Focus Financial co-founder and chief operating officer Rajini Kodialam noted in today's announcement that Watterson Financial would be Connectus's first UK outpost, and that it was an ideal company to be awarded that distinction.
The Focus expansion comes as wealth managers around the world are joining forces to take advantage of the scale and synergies that being part of a larger entity can bring, as the financial advice and wealth management industries become increasingly costly, challenging and competitive, particularly for smaller firms.
In the U.S., Focus currently has some 71 member firms in its stable, all of which operate their businesses under their own brand names, but which are able to take advantage of a range of resources that Focus Financial makes available to its partner firms, as well as help in making sub-acquisitions, in exchange for a share of the partner firms' cash flows, according to company materials.
In addition to the U.S. and the UK, Focus has member firms in Australia and Canada (Toronto-based wealth planning and investment manager Nexus Investment Management, as well as Toronto-based multi-family office Prime Quandrant).
It has annual revenues of around US$1.3bn, and a market capitalization of approximately US$3.2bn.
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