Prior to the financial crisis, some observers cast financial firm rollups as emerging powerhouses of the financial service industry. Now though, thanks largely to National Financial Partners' stock valuation, which has been battered, and Boston Private's property loan woes, some see them as a bull market fad.
Focus's acquisitions chief Rajini Kodialam said there is a vital difference between it and other firms with which it is broadly categorized: Unlike National Financial Partners, which houses "nonrecurring insurance-focused firms," Focus works exclusively with "recurring-fee-based wealth-management focused firms." And unlike Boston Private, Focus maintains no lending practices. National Financial Partners' stock price is about 85% off its early 2006 high; Boston Private's stock is down by about the same rate since early 2006.
Pure-play aggregators of retail RIAs like Focus and Nashville-based WealthTrust operate in a market with about $1.36 trillion in client assets across 14,500 firms, according to the market research firm Cerulli Associates.
Copyright (c) 2009, Dow Jones. For more information about Dow Jones' services for advisors, please click here.