Focus Financial results up in Q2 thanks to mergers and acquisitions operations RIA

Although it fell far behind its pace last year, the CEO of aggregator RIA Focus Financial Partners predicts the firm will deliver “one of our best years for mergers and acquisitions” in 2022.

CEO Rudy Adolf made the prediction when the New York-based company reported its earnings for the second quarter on August 4. In 2021, the company entered into 38 deals to acquire RIAs, including 14 that joined Focus as new partner companies that can deploy the company’s capital for their own future acquisitions. Focus did not hit half of those numbers in the first six months of 2022.

Wall Street has expressed some doubts on the company because its definition of organic growth includes these acquisitions. This measure does not traditionally extend to M&A transactions or market appreciation. The company carries billions of dollars of debt on its balance sheet as it racks up the deals. However, its revenue and profit for the first half of 2022 were each up 30% from their levels a year ago.

“Our partners are demonstrating their ability to handle challenging market conditions, and our business is resilient in this challenging environment,” Adolf said in a statement. “We believe the opportunities for growth during and particularly after significant market volatility, combined with the operating leverage of our business, will drive our sustained outperformance once conditions stabilize.”

For key takeaways for financial advisors and other wealth management professionals from Focus’ second quarter earnings report, scroll through the slideshow. To view the analysis of the company’s results for the previous two quarters, click on here and here.