In 2002, Rob Francais and a group of partners from a financial advisory business sold to Harris Bank were so adamant about staying independent that they refused to join the bank and instead started their own firm.
Five years later, Francais, 42, has retained that streak of fierce independence.
After building up Quintile Wealth Management into a family office advisor with 62 wealthy families as clients and $2.5 billion under management, growth for Francais still didn't mean selling out to a top wealth manager.
Instead, Francais surprised the wealth management industry last week by merging Los Angeles-based Quintile with Kochis Fitz, a San Francisco-based financial manager led by industry legend Tim Kochis.
Not surprising are the ambitions.
"Given our clientele and the deep experience of our staffs, going national is definitely our main goal with this merger," said Francais, a certified public accountant. "Growth is the only way to attract and retain new talent but we had to stay private."
The new firm will be called Kochis Fitz/Quintile and will have some $5 billion in total assets under management, making it the largest wealth advisory firm in the United States not owned by a bank or brokerage, according to the two companies.
Kochis Fitz brings some 320 corporate executive clients to the deal with an average $7 million in assets. By contrast, Quintile's wealthy families have about $50 million in average assets.
Combined, the two firms will now attempt to stretch out to 10 major markets across the country, and possibly even Asia, taking advantage of their complimentary strengths. Quintile provides a broad array of family office services, which not only include investments but estate planning and tax services. Kochis Fitz, founded in 1991, is particularly strong in portfolio management. Kochis, 61, has long been one of the top ranked money managers in the United States.
Francais said he pursued the merger after realizing how complementary both firms' services and culture were. He also disliked the idea of pursuing growth by being part of a larger corporation, such as Bank of America, which bought up U.S. Trust several years ago.
"It makes it hard for your clients to trust you when you tell them they need life insurance and you're trying to sell it to them at the same time," Francais said. "We've found that you can't buy culture or trust."
R.J. Shook, president of The Winner's Circle Organization, which compiles rankings of investment firms for the Business Journal and other publications, said it was definitely unusual for a smaller investment shop seeking growth not to sell out to a larger entity for big bucks.
"I'm sure this merger surprised a lot of people," said Shook. "To stay private and avoid those big paydays sent quite a strong message that they want to remain client-first in their approach."
The deal is also unique because it will leave 32 of the combined firm's 68 employees as shareholders. Plans call for Kochis to be chief executive until 2009, to be succeeded by Francais.
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