Focus Financial Partners and the U.S. RIA Industry in 2014 Harvard Case Solution & Analysis

In2014, Rudy Adolf, the CEO as well as the founder of Focus Financial, and two other co-establisher’s of the firm are contemplating distinct growth strategies to strengthen Focus Financial position as a leading aggregator of individual wealth management firms in U.S. Focus has multiplied from $3.5B in the client assets at its beginning in 2006 to over $70B in and it has received more than 30 Registered Investment Advisor firms, on a secular shift in investors' priorities from a conventional product and commission-driven brokerage to a fiduciary, fee-based client advice model. Since the 1970's, independent SEC registered investment advisors (RIAs) have been a growing section of U.S. wealth supervisors, slow paced winning market share from the overwhelming, conventional wire house broker-dealers. But with an amount exceeding $1.4 trillion in assets under management in year 2013, the RIA business is also at a crossroads, with aging advisers with limited sequence strategies and limited access to capital to fund intergenerational transfers, rising compliance and regulatory complexity, competition from new advice delivery models, and fragmentation.

The case examines the RIA business model, the chances for growth through consolidation in this industry, along with the competitive landscape in the wealth management aggregator sector through the lenses Focus Financial business model, its acquisition and M&A model for RIAs, and its wirehouse breakaway plans. The case analyzes Focus Financial strategy in the face of growing potential growth trails competition, and IPO scenarios. The case presents opportunities for students to explore similarities and differences involving the broker dealer and the RIA retail wealth management business models, strategies for growth and consolidation in the retail wealth management business, and problems related to valuation, organization and incentives of retail wealth management businesses.

PUBLICATION DATE: June 10, 2014 PRODUCT #: 214103-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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Focus Financial Partners and the U.S. RIA Industry in 2014

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