In 2023, Focus Financial Partners was taken private in a sale to private equity firm Clayton, Dubilier & Rice. Months later, Focus started a multi-year effort to merge its 90 independently-operated subsidiary practices into a handful of its largest firms, or “partners.”
Today, over 60% of the firm’s earnings come from Focus Partners, with about 40 of the 90 original firms having been consolidated.
Chief Strategy Officer Travis Danysh recently spoke with Wealth Management about the consolidation efforts, the firm’s unified equity strategy and how Focus’s M&A model has evolved from its early days.
The following has been edited for length and clarity.
Wealth Management: What’s the status with the Focus consolidation efforts?
Travis Danysh: In terms of consolidation, over 60% of our earnings are now in Focus Partners, so there’s been a pretty significant amount of consolidation in that regard. There was a defined strategy around how we went about it. So we went out to our biggest, most capable firms first to essentially form the chassis for the combined business: The Colony Group, Buckingham, SCS, Kovitz and then Gelfand on the business management side. From there, we went to firms with real, distinct capabilities that we thought we could scale across the consolidated business.
For example, our custodial referral business has been entirely built by firms that we consolidated, especially on the Schwab Advisor Network side. And we’ve seen a significant tick up in that business as it’s been consolidated into the holistic business.
Then what happened at the end of 2025 and going into the beginning of 2026, we put Kovitz into Focus Partners Wealth. Kovitz was a $50 billion business. That was a big lift, but a great outcome. That’s where we are today. We’ve got a nice pipeline of internal deals.
WM: How many firms have not been consolidated, and how are they structured?
TD: Each of those firms essentially has two entities. It has an operating entity, which is the RIA. That is a wholly owned subsidiary of Focus. And then it has a management entity that’s owned by some of the partners. And then they have an agreement that allows them to run the RIA with some guardrails as it relates to their relationship with Focus. So there are, call it 50-ish, of those firms still in the network. And we started with approximately 90 when we started the consolidation.
Going back to what I said about earnings, you can see that we’ve bought some of the biggest, most capable firms first. The way these deals work is, there is no put or call clause in our relationships with network firms. They have to opt into this.
There’s been a ton of interest in joining forces with Focus Partners for a couple different reasons. Some of the firms that are still left in the network are $5(billion), $10 billion RIAs. So by their own account, they’re big, big firms. But they all see the benefits of scale and what they can get by joining forces with Focus Partners. And then, we’ve got a unified equity story through Focus Partners, and that’s been something that’s been really attractive. All of our internal M&A has involved an equity component. So folks who convert over to Focus Partners are taking equity in Focus. And it’s driven a lot of alignment in the business that didn’t exist in the old model, where you kind of had a corporate entity that had equity in Focus, and then you had a bunch of subs that basically owned an interest in their management entity, and those things didn’t always align.
I think we’ll have a busy back half of the year, and then this will probably go on for a while. There are firms that are content in the network. There are other firms that have essentially told us, “Hey, we’re trying to get to this before we do the deal.” There are firms that are actively in our pipeline.
WM: Can you expand on the unified equity component? How is that structured when a firm joins Focus Partners?
TD: We’re essentially buying the management entity for a combination of cash and Focus equity. So they take some cash and some equity in Focus. They have the same equity that I have, the same equity that our financial sponsors have, the same equity that the rest of our management team has. It helps that the business has performed really well and the strategy’s gone well. But it’s also driven cultural alignment that has mattered a lot. We feel like one company, not 90 different companies.
WM: Are you pursuing any external deals?
TD: We are. Last year, we bought a firm called Churchill, a big firm on the West Coast, with a little less than $10 billion at the time we bought it. And we’ll announce a deal here in a couple of weeks.
On the external side, we’re being much more calculated and targeted around businesses that bring a handful of things to the table or some subset of these things. Ideally, they’re bringing a capability that we desire, and we believe can be scaled within our consolidated business. The Fidelity referral program largely spawned out of us buying Churchill. That firm had a growth engine that we really desired.
And then they had a model that was very sales- and investment-product-focused, and they really wanted to evolve into a more holistic wealth offering. That’s our bread and butter.
We’re also still doing deals with really good advisors and markets that we want to be in, that are growth-oriented.
What we’re not really doing anymore is you’re probably not going to see us leading the pack in terms of external M&A deal count. For years, Focus would be two or three times everybody else in terms of just deal volume. I still think you will see Focus do some of the biggest and most complex deals in the industry. We have both the expertise and the balance sheet to do those deals. That’s an area where you will continue to see us play a lot, but we’re not really doing the burn-and-churn stuff anymore.
WM: And you’re also moving away from doing deals for succession.
TD: For many, many years, Focus’s initial thesis had a big succession component to it, and we’re not really doing that much anymore. That doesn’t mean that there aren’t succession components to some of these deals, where there might be an advisor or two that might be ready to retire. But we would much prefer to partner with businesses that have solved the advisor succession component, and there may be a liquidity thing they need from a succession perspective. But we’re not buying businesses that have a ton of key-man or key-woman risk in trying to solve it.
WM: When you’re doing the external deals, are folks more interested in the old network model or in Focus Partners?
TD: We’re not doing any deals in the old network model right now, so that’s not a deal model that’s on offer when we talk to folks.
We have done some M&A into our network firms. So if a firm would like to join one of our network firms, Focus will support that from an execution and balance sheet perspective. That happens not with a great degree of regularity, but it does happen. We did a deal late last year for Badgley Phelps in the Pacific Northwest. They bought a firm also in the Pacific Northwest that they had a long relationship with.
We often find ourselves in processes where people, at the outset, are interested in talking about the old structure because they know it. We were in that structure for a really long time, and I think as they progress in the discussions and understand what we’re building and the scale of the Focus Partners business, they become very attracted to that part of the business. I don’t think we are losing any deals because we’re not offering the network structure anymore.
WM: When you’re doing those external deals, are you talking to them about the different hubs and which one might be a good fit?
TD: It’s pretty clear. I mean, on the wealth side, there are really two choices. There’s Focus Partners Wealth or SCS, which has such a defined client type, with an average client size of $100 million. Ninety-five percent of our activity on the M&A side is with Focus Partners Wealth.
WM: What has been the integration process, and how is that going?
TD: We’ve done over 300 deals in our history, so we’ve got a lot of deep integration expertise. My perception is, and this could just be a perception, that there are a lot of businesses in the industry that may be co-branded but are not really integrated.
We said, ‘We’re going to go for the Gusto and build one company.’ And so we spent a lot of time on the front end assessing how a firm fits into Focus’s model. We have a common tech chassis, we have a common compensation structure for our advisors, we have a global investment committee. It’s got a fair bit of flexibility in it, but we don’t have teams running their own individual investment functions. And we have folks truly dedicated to integration full-time, and we’ve essentially been running an integration project for the better part of three years.
We want to have one service model for clients. We want clients to have one experience. We want a similar team structure on all of our advisory teams. Do those things in some cases take a few months to snap into place? Of course, but the direction of flight is always in that direction, and that’s always what we’re communicating in our due diligence processes.
WM: Focus’s CEO recently said the firm is prioritizing internal investment. What internal investments are you focused on?
TD: In our old structure, it was very difficult to invest against any real strategy because you’d have to do it across 90 different firms that had different business models and different ADVs. So true, targeted, tailored investment was very difficult to do. That’s not the case now.
One area of investment is growth, where we’ve poured tens of millions of dollars into it since we’ve pivoted our strategy. I mentioned our success on the custodial platforms, but we’re also spending a ton of money and seeing great results in terms of digital marketing and lead gen and areas like that. We have an entire dedicated growth team. We have sales forces that are aligned around these growth channels, all things that would have been very, very difficult, if not impossible, to build out in the old network structure.
Even things like technology and AI that in the old world, we would have had to think about how do we deploy this across all these different business models? We were able to do that in a very targeted way within Focus Partners.
One of the biggest investments we’ve made is in talent. If you were to look at our leadership team, it’s a combination of people like myself and Adam [Birenbaum], Justin Ferri, Zinovy Iosovich who have been around the organization for a really long time. But we’ve also gone out and gotten an awesome CFO, a phenomenal general counsel, a head of AI, a new CTO, all these roles that didn’t exist in our past life. We’ve been able to do that against the breadth of a really big P&L now and Focus Partners, and give people mandates to where they can really effectuate things in the business.
WM: You mentioned that Focus was the largest owner of business managers. What’s the strategy behind that?
TD: Business managers do a lot of what a wealth manager would do for entertainers, musicians, actors, folks that support those industries, directors, etc. And increasingly, those businesses are gaining real growth in the athlete space, the influencer space and the ultra-high-net-worth space. And I jokingly refer to them as accounting firms on steroids. If you’re a musician, you yourself are the product, so you have to build these support teams around yourself. They do things like tour audits, royalty audits, help with catalog sales. But they also file tax returns, provide family office services and do all kinds of things you would expect from a family office.
The one thing they do not do is investment management. We have found a synergistic opportunity for our wealth business to serve as the backbone of the business managers on the investment side. Then we have cases too where in our UHNW business, folks have really complex accounting and tax needs, and they will be clients of our UHNW business, but they’ll also be clients of our business managers as well.
