Focus performed well in Q1, but Q2 presents a challenge
Focus Financial Partners’ earnings report for the first quarter impressed. But a bigger challenge may loom in the second quarter.
The metrics Focus reported on Thursday morning show that the company’s acquisition model — in which it takes a preferential stake in a partner RIA’s earnings — gives itself downside protection. Focus’ revenue in the first quarter of 2020 dropped by just 0.9% sequentially, to $337.1m. That preferential stake means that Focus gets paid first out of its partner firms’ earnings, no matter what market conditions may be.