Focus Financial inked another big-figure deal after a blockbuster 2017 that netted more than two dozen RIAs, according to the firm.
The Cornerstone Wealth Group, formerly with LPL Financial, advises on $1.3 billion in client assets and manages $800 million, according to CEO and managing partner Craig Rubrecht. The firm serves mass-affluent and high-net-worth clients with 15 financial advisors on staff and eight offices in North and South Carolina and San Francisco.
Founders Brian Needleman, Andy Smith and Jeff Carbone established the original practice at Raymond James in 2001, before joining LPL two years later and bringing Rubrecht on board.
“We’ve been in conversation with Focus on-and-off for several years,” Rubrecht says. “The big thing for us was when we met with the other partner firms. They are truly some of the elite RIAs in the country.”
Focus landed a blockbuster $16.5 billion megadeal with Boston-based SCS Capital Management last May — touted as its biggest deal to date — and snapped up a $1.5 billion partnership Eton Advisors in September.
Client assets have also skyrocketed in recent years at a compounded annual growth rate of 22% from 2011 to 2016, according to research from Cerulli Associates.
“It’s not only because of the resources, and the resources at partner firms,” Rubrecht says about the move. “You spend a certain amount of time running your business and a certain amount actually working for your clients. We took a look at where Focus can specifically help us — the big one was technology.”
The platform offers technology, operations, compliance and marketing, and also facilitated Cornerstone’s partnership with Fidelity Clearing, the firm’s primary custodian.
Cornerstone now has a seamless “tech stack,” Rubrecht says, including eMoney, which Fidelity acquired in 2015, the CRM platform Redtail and the technology provider Orion Advisor Services.
“It was a strategic decision because we wanted to work with eMoney,” Rubrecht says. “That tech for us is about creating a client experience. That’s going to allow us to serve our clients better — and going to spur organic growth,” he says, adding that 90% of his clients come from referrals.
Focus landed an influx of private equity cash in April last year. Stone Point Capital and KKR set Focus’ value at $2 billion, up from a valuation of $750 million in its last major equity sell-off four years ago.
The consolidator has grabbed more than 50 firms since it launched 12 years ago, according to company data.