August 15, 2025
Focus On... The Evolution of Focus
In this special edition of Focus On…, we departed from our usual format to welcome our first guest host: Steve Levitt, Managing Director at Houlihan Lokey and one of the most respected voices in wealth management dealmaking.
Steve brings deep experience advising RIA founders and investment firms through complex, high-impact transactions. In this conversation, he sat down with Michael Nathanson, CEO of Focus Financial Partners, to discuss Focus’ recent evolution and what that means for our current partners and team members, our firms’ clients, and anyone who may join us in the future.
Together, they discussed the strategic rationale behind Focus’ take-private transaction, the role of scale and interdependence in its growth, why it’s becoming the destination of choice for leading fiduciary-advice professionals, and more.
Building for the Long-Term
The conversation began with a look back at Michael’s tenure as CEO of The Colony Group, a firm that played a foundational role in what is now Focus Partners Wealth, Focus’ largest business unit. When Michael became CEO of The Colony Group in 2006, the firm operated like a collaborative, where advisors shared infrastructure but mainly ran their practices independently. He believed the firm could achieve more by aligning around a common mission and vision and operating as a fully integrated business.
That vision ultimately led The Colony Group to join Focus in 2011. With the credibility, capital, and deal expertise Focus provided, Colony began executing a broader strategy to grow through acquisitions, completing nearly 20 transactions over approximately the next decade. These transactions weren’t about chasing size or scale for its own sake. Instead, for Colony, they were a way to build new capabilities, expand reach, deepen specialties, and better serve clients.
“We didn’t just do mergers to get bigger,” shared Michael. “We did mergers to get better … to gain greater expertise and new capabilities.” That strategy led to Colony using transactions to acquire institutional expertise, international investing expertise, a specialty in advising professional athletes, business-management capabilities, and more. This same approach continues to guide how Focus approaches mergers today: not as ends in themselves, but as vehicles for building and becoming something greater.
The Take-Private Decision
As The Colony Group evolved within Focus, so did the complexity of the broader business model. When Colony joined Focus in 2011, it managed just over $1 billion in assets. By 2023, that figure had grown to about $20 billion. Along the way, Focus became a public company in 2018. But over time, many network firms, particularly Colony and Buckingham, began to feel the limits of a model built on strict autonomy and separation.
“A number of firms within Focus, including two of the largest ones, which were Colony and Buckingham, realized we had similar values, similar thoughts,” said Michael. “We started asking: What would it look like if we could come together and combine our capabilities?"1
While upholding the fiduciary standard in client relationships remained essential, leaders across Focus increasingly saw the need for greater interdependence. Working together more closely, they believed, would give them the ability to scale services, expand capabilities, and create even more value for clients.
That potential caught the attention of Clayton, Dubilier & Rice (CD&R), a leading private equity firm, which identified Focus as undervalued in the public markets and saw an opportunity for value creation by enabling people to come together and operate at scale. In partnership with Stone Point Capital, a long-time investor in Focus since 2017, CD&R led the take-private transaction. The goal was not a dramatic overhaul, but a thoughtful evolution, transforming Focus from a loose association of firms into a unified company built for sustainable growth and excellence.
For Michael, this decision reflects a deeper understanding of the fiduciary duty. “People like to think about the fiduciary standard in the easiest way possible,” he said. “Well, okay, being a fiduciary means I have to be mindful about how I manage money or the decisions I’m making for clients relative to economics... Of course, clients’ interests should come first in all decision-making. But that’s table stakes. That’s basic. When it comes to thinking about your company, when it comes to thinking about whether I do something like a merger because I think it’s actually in the best interest of clients, it’s much more challenging.”
That’s exactly how the decision to go private was framed: What is best for clients? What is best for team members? The answer was clear for many: one by one, firms lined up to be part of something greater, where they could achieve far more than they could ever accomplish on their own. Together, they set out to create a stronger, faster-growing company with expanded capabilities for clients and advisors, the full power of scale and industry-leading platforms, a broader and deeper team, and the ability to serve our firms’ clients to the best of their collective, combined capabilities.
Evolving Towards One Focus
Over the course of approximately a year and a half, this rapid integration transformed the landscape, bringing roughly 25 firms under a more scaled, collaborative model. Today, Focus is organized under an operating model built with two distinct but complementary divisions: Focus Partners, which encompasses its commonly branded business units, including Wealth, Advisor Solutions, Family Office & OCIO, Business Management, Canada, and Australia; and Focus Network, a network of over 60 firms that are managed independently while benefiting from collective scale.
As Michael explained, “We don’t force firms to join [Focus Partners]; they have to want to be part of this. But we do make the case around capabilities: we can offer an investment platform that now incorporates the best of many companies, plus the combined planning capabilities of some of the industry’s leading firms. Through scale, we can now offer a range of services, including tax return preparation, bill pay, family governance, and lifestyle concierge services, more efficiently and in a better way.”
Beyond capabilities, this model opens up greater opportunities for team members and directly addresses long-standing challenges like succession planning while offering a compelling and aligning equity incentive.
Looking ahead, Michael projects that about 80 percent or more of Focus’ earnings will come from the Focus Partners division, though many firms are expected to remain part of the Focus Network division for the foreseeable future. Importantly, Focus continues to work closely with its network firms, allowing them to benefit from Focus Partners’ scaled services, including talent recruitment, technology, and investment capabilities. The advisor-client relationship remains central, but scale can now support nearly every other aspect of the business.
Mergers remain a priority, especially for the Focus Partners division, where Michael sees the greatest growth potential to expand capabilities, acquire industry-leading talent, and continue to work towards building the leading fiduciary advice company in the world. At the same time, Focus will continue to consider thoughtful transactions for its network firms. “I believe in win-win solutions,” said Michael. “We can offer services to our network firms that make them better and are more efficient economically, while also being accretive to value for Focus.”
Accelerating Growth Through Focused Strategies
With the groundwork laid through integration, scale, and enhanced capabilities, Focus is now prioritizing a new era of accelerated, intentional organic growth.
“I believe we can grow faster—6%, 7%, even 8% organically—because other firms of a significant size have done that, and because we’ve done the work,” said Michael. “We have shifted from being a leader in inorganic growth, where we’ve done well over 300 transactions since our founding, to embracing a balance of inorganic and organic growth. For the first time, we’re being more intentional about organic growth.”
Focus is promoting organic growth through a two-pronged approach around advisor-driven and platform-driven strategies. On the advisor side, this means reshaping culture, providing stronger equity and compensatory incentives, improving access to data, and equipping teams with better tools and capabilities. Focus is also investing in specialization, recognizing that clients are increasingly looking for advice tailored to their unique circumstances, whether they’re doctors, lawyers, athletes, entrepreneurs, or executives.
“I believe the world is moving away from segmentation simply by asset size and towards segmentation that considers that factor but is also focused on specific client needs,” shared Michael. “A client who is a lawyer has different needs than a client who’s a doctor or an engineer or a private equity investor. That’s where we’re heading, toward more niche expertise.”
Platform strategies are evolving in parallel. Focus has become one of the top firms on referral platforms like Schwab Advisor Network (SAN) and is leaning into others like Fidelity’s Wealth Advisor Solutions (WAS) and SmartAsset, aided by the adoption of a common branding architecture.
“This is the power of scale and interdependence,” said Michael. “You take a firm like Colony or Buckingham and combine it with a fast-grower like InterOcean or Gratus—with their capabilities, know-how, and access—and the next thing you know, the whole platform is growing.”
Looking ahead, Michael is clear about Focus’ vision for the next three to five years: “We will be the leading fiduciary advice company in the world. Our firms’ clients will perceive them as a company built just for them, and their advisors will have access to all the resources and capabilities that only the largest institutions in the world could historically offer. We will deliver a client-first, boutique experience, despite the fact that we’re the largest player in the industry.”
What's Next: Scale, Succession, and Purpose
As the industry matures, Michael sees the next chapter defined by scale, interdependence, and generational transition. “We are moving from the age of independence to one of interdependence … where the most successful firms will learn that they have to work with others, both within the industry and outside the industry,” he said. “We’re moving to a place where RIAs will truly be capable of taking on the biggest banks and wirehouses in the world because they have the scale to do this.”
Equally important is the rise of next-generation leadership. “The founders who built this industry are beginning to retire,” said Michael. “What will differentiate firms from each other is their ability to replace those founders with people who are equally capable and equally focused on being great entrepreneurs.”
But at the core of it all is purpose. “I know what my personal mission is,” Michael shared. “It’s to live my most extraordinary life by helping others live theirs. At my funeral, which I hope is many, many years from now, I want people to say that I helped them somehow. Through Focus, I’m able to express that purpose to our firms’ clients, to our colleagues, and to all the people that are joining together to be better. And I’d like to think I’ve had something to do with them coming together.”
Footnotes
[1] Disclaimer: The quotes in this blog have been edited for clarification and brevity. Any alterations made do not change the intended meaning of the original statements.