Sometimes, financial advisory firms have to team up -- and bring in an outside investor -- to rapidly grow.
For example, family office veteran Rick Flynn, who has spent years serving ultrahigh-net-worth clients, recently doubled the size of his new firm.
Flynn, who went out on his own and launched Flynn Family Office last year, recently rebranded his practice to FFO LLC, which he says no longer stands for his last name but for Families First Office.
Along the way, he persuaded two other industry veterans to abandon their longstanding brands and merge their operations with his.
“Our intent from the beginning has been to grow FFO’s presence as a premier, bicoastal, multifamily office and business management firm by merging with other firms that share our dedication to client service,” Flynn says. “Now that we have completed two such mergers and welcomed additional thought leaders to the FFO family, all firms are dropping their eponymous names to work under the FFO banner.”
FFO, part of the Focus Financial network of fiduciary firms, merged with McNulty Group, a New York-based family office with tax and accounting expertise. Founder Joseph McNulty joined FFO along with five team members.
Capell Rudolph, a business management firm serving entertainment industry clients in Los Angeles, also merged with FFO, bringing along co-founder Lawrence Rudolph and 29 team members.
The two firms had been in business for 20 and 30 years, respectively.
EYE ON SUCCESSION PLANNING
The mergers weren’t driven by succession planning needs for the founders, says Focus Financial co-founder Rudy Adolf, but “when the time is right,” they will receive support from Focus Financial in transitioning to the next generation of firm leaders.
Focus Financial often provides equity to allow firm founders to retire and younger financial advisors to purchase stakes in firms.
Although the former McNulty Group team plans to increase the FFO footprint in the New York area, its former Capell Rudolph counterparts in Los Angeles will seek to expand their market in California.
The three firms completed the two mergers on Sept. 1 for undisclosed terms.
Focus Financial facilitated the three-way marriage by contributing mergers and acquisitions expertise and an injection of capital, according to a statement from the company.
“Our partnership with Focus has been instrumental to our success over the past year,” Flynn says in a statement.
He co-founded his firm last year along with two colleagues from the hedge fund auditing firm where they worked, Rothstein Kass, after the accounting firm KPMG acquired it.
NO INVESTMENT ADVICE
FFO doesn’t manage or advise on its clients' investments, according to its website, instead helping clients find investment managers.
It also handles or assists them with a wide variety of high-net-worth tasks, from selling their businesses, renovating their homes and hiring household staff to protecting against security risks, both online and off. Flynn has co-authored three books that cover the intricacies of this kind of planning work.
“Ultra HNW clients have sophisticated needs that require world-class expertise and execution,” Adolf says.
“Very few firms in our industry have the qualifications and resources to cater to these type of clients. Rick Flynn and his partners have been working with [them] for many years and have established themselves as true thought leaders and trusted advisors,” Adolf says.
This story is part of a 30-day series on how to prosper as an advisor. It was originally published on Sept. 24, 2015.
