Focus Financial bags $3.1 billion, 50-person RIA and why it 'really is impressive'

The significance of Kovitz Investment Group is not $60 million per advisor ($3.1 billion) as Merrill averages $100 million per advisor without being able to declare fiduciary status in the client’s best interest.. The emphasis on Kovitz beating the S&P 500 is indeed spectacular especially when 40% of the earnings on retirement savings is lost to brokerage fees, commissions and administrative cost. This means Kovitz beats the S&P by more than 40% .

Focus is selling itself short by not being concerned about how its “advisors” do business. It is very difficult to create transferable value for subsequent investors and stakeholders with a loose aggregation of brokers each having a unique approach to doing business making it impossible to scale as it is unmanageable. It leaves far higher margins and valuations on the table. The promise of a lower cost, preemptive value proposition in the best interest of the investing public which is scalable is essentially the promise of large scale institutionalized support for advisory services…but you have to literally be in the advice business to execute. The alchemy of creating value argues for scale and high level technical competency in advisory services.

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Stephen Winks

Did anyone review the website and the performance disclosures? Just curious because if you look at the composite performance they cite for the Core Equity Portfolio it consists of 'carve outs’ (like up to 90%+) prior to 2010. Who knows how all that was done (they tend to be selective and convenient) and carve outs make it very difficult to evaluate the track record. Once you eliminate the carve outs as they did in 2011- they have not outperformed the index. Also- the mutual fund performance they cite has not out performed the index. So I don’t get the claim.

Seems as though they have hedge funds they manage as well- so I’m not sure what these folks are. Are they an advisory firm using proprietary products (ouch on the fiduciary front) or a money manager which has middling performance and hasn’t gown all that well? Also – don’t understand where they get the <del>5.29% 2015 return for the benchmark i</del> if the S&P 500 is the benchmark.