New York-headquartered Focus Financial Partners will establish a full-time Australian presence and is seeking to recruit executives with knowledge of the wealth management market.
Focus Financial Partners entered the Australian market earlier this year, with acquisitions of Melbourne financial services boutique MW Lomax and Brisbane’s Westwood Group.
Speaking to InvestorDaily, Focus co-founder and managing director Rajini Kodialam said the firm will continue to make “hub and spoke” deals of this kind, and is looking to establish an Australian workforce.
“I want to build a team either in Sydney or Melbourne, we are flexible on the city, but they need to have a deep understanding of the [financial services] industry and high level of emotional intelligence. This is a people business,” Ms Kodialam said.
Reflecting on recent moves such as the departure of former BT Financial Group head of licensee development Annick Donat to the non-aligned sector of the wealth management market, Ms Kodialam said she would happily consider hiring former institutional managers with knowledge of the market.
Focus will not, however, be making acquisitions of institutionally-aligned firms, instead opting to confine its M&A activity to the independent and boutique space.
A former McKinsey & Co consultant, Ms Kodialam said Focus’s value is in the niche silo of non-conflicted, independent wealth management and not suited to firms aligned to product manufacturers or technology companies. Focus owns stakes in more than 40 registered investment advisory or “independent” firms in the US.
Ms Kodialam said she believes Australia is on the cusp of a “great journey” whereby the influence of institutional ownership will be replaced by the entry of private, non-aligned capital
“This is a baby industry, even in the US it only really began in the '40s, and this is really the first major transition it has gone through, from institutional ownership to private non-conflicted ownership that is in the clients’ best interests,” she said.
“In Australia there is this growing movement of independence, there is a fragmentation, but there is also a thirst for consolidation among the boutique and non-aligned players, and that is the perfect situation for partnering with a firm like ours.”