Focus Financial Partners, one of the largest aggregators of RIA firms, announced at its semiannual partners meeting today that it was in advanced discussions to merge Buckingham Strategic Wealth of St. Louis into the Colony Group of Boston. Given that Buckingham and the Colony Group were long regarded as the two most successful within Focus’s network of more than 60 RIA firms across the country, the transaction raises the question what Focus plans to do with smaller advisory shops.
When Focus was establsihed in 2007 by its founding CEO, former McKinsey partner Rudy Adolf, it acquired majority equity stakes in different RIA firms, whose executives were told they could continue to run their businesses with minimal interference from the parent company. As the RIA industry evolved and more acquirers entered the business, a major criticism of Focus was that it failed to integrate the firms within its network.
When Clayton Dubilier & Rice acquired Focus and took it private last year, it was widely expected that the private equity firm would seek to integrate and rationalize the dispersed, far-flung network. Clearly, some executives like those at Buckingham and The Colony Group, which have a combined $110 billion in assets. are amenable to merging operations. How many others react remains to be seen but the signal is clear—if the network's two most successful firms are willing to merge, others might want to consider it.
Adam Birenbaum, who currently serves as chairman and CEO of Buckingham, will become the new CEO of the new entity forged by the firms’ combination, according to a press release. Michael Nathanson, the current CEO of both Colony and Focus, will shift to serve solely as CEO of Focus.
The release also said that Buckingham’s sister company, comprehensive service provider Buckingham Strategic Partners LLC, will also continue to operate under Birenbaum’s leadership, further expanding the opportunity for its turnkey asset management platform, which is used by many advisors who are not affiliated with Focus. Jonathan Scheid will continue to serve as president of Buckingham Strategic Partners.
“This transaction will create an RIA of truly substantial scale and marks a milestone moment in the history of our industry. The combined firm’s scale underscores and accelerates the ongoing evolution we are seeing in the wealth management space to cultivate better opportunities for clients and advisors and to offer them outstanding capabilities and services,” said Nathanson in the prepared statement. “The decision to unify these two industry-leading firms is an exciting one, and we cannot wait to see what Colony and Buckingham will accomplish when they join forces. Together, the combined firm will represent nearly 1,200 employees, more than 90 office locations, and tens of thousands of clients.”
“There are occasions in an organization’s journey that are true landmark moments. It is a dream come true for Buckingham to be able to take part in exactly that kind of transformational opportunity,” said Birenbaum in the press release.
This transaction comes on the heels of other recent growth moves for Colony, including the firm’s recently being joined by GW & Wade and InterOcean Capital.
“This is an exciting opportunity to bring together complementary services and capabilities that will further enhance our common interest to serve clients better,” said Zinovy Iosovich, president and chief services officer of Colony, in the release. “We are thrilled to be joining forces with the Buckingham team and to take this next step in our journey of collaboration to build an industry-leading, transformational business.”