The owner of an Indianapolis-based RIA that chiefly serves dentists says his decision to sell his practice to Focus Financial Partners LLC will help with succession plans and provide him more time with his clients. “The big need I feel is not to get out of the office. It’s to do more of what I love doing, and less of what I hate doing,” said Brian Hufford (right), 62, founder and chief executive of Hufford Financial Advisors. The firm, with 700 clients across the nation and $900 million in assets under advisement, closed its deal with Focus on Friday. It comes less than two weeks after Focus announced its acquisition of Colony Group, a $1.3 billion practice in Boston. Hufford Financial brings the number of Focus partners to 22. One of the largest aggregators in the country, Focus reports more than $45 billion in assets.
Hufford, a CPA and certified financial planner, opened his accounting practice in 1977 and formed an RIA 20 years later. Dentists were part of his practice from the beginning. He said he felt he needed to expand into financial planning because a focus on taxes limited his ability to provide his clients with better retirement solutions. Today the practice has eight CPAs and seven CFPs. Hufford said he found himself speaking on financial issues at dental conventions, which helped grow the practice to clients in all 50 states. Hufford also writes a monthly column for a practice management magazine, Dental Economics, and his practice has partnered with the Academy of General Dentistry, an association with 37,000 members, on educational programs.
Dentists have specific financial needs that set them apart from other medical professionals, Hufford says. Those who want to buy into practices when they graduate from dental school can face bills of $300,000 to $500,000, on top of education debt of $150,000 to $250,000. Equipment costs are particularly burdensome. With baby boomer dentists starting to retire, however, there is a shortage of practitioners that provides advantages for younger people who want to enter the profession, he said. Dentists’ financial needs vary widely, Hufford said, a reality that the marketplace with its one-size-fits-all products and services often fails to recognize.
Hufford said he bought out a partner in 2004 and later hired an investment bank to help him explore options. It was difficult to find a business whose pockets were deep enough to finance a deal without changing the culture of the practice to the detriment of the staff and clients, he said. Focus provides cash and stock to sellers in return for a share of profits, Hufford said, but it also allows him to manage the practice as he sees fit while allowing younger associates the chance to acquire stakes in the business later. (Terms of the deal were not disclosed.) Hufford said that, among other things, Focus is providing assistance with technology issues that occupied more of his time than he liked.
“It’s really a huge commitment to grow the company in the right way,” he said.