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As filed with the Securities and Exchange Commission on May 24, 2018

Registration No. 333-                  


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Focus Financial Partners Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  6282
(Primary Standard Industrial
Classification Code Number)
  47-4780811
(IRS Employer
Identification No.)

825 Third Avenue, 27th Floor
New York, NY 10022
(646) 519-2456

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

J. Russell McGranahan
General Counsel
825 Third Avenue, 27th Floor
New York, NY 10022
(646) 519-2456

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Robert Seber
Brenda K. Lenahan
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26th Floor
New York, New York 10103
(212) 237-0000

 

Richard D. Truesdell, Jr.
Derek J. Dostal
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000



Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after the effective date of this Registration Statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

Emerging growth company ý

          If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided in Section 7(a)(2)(B) of the Securities Act.    ý



CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Class A common stock, par value $0.01 per share

  $100,000,000   $12,450

 

(1)
Includes Class A common stock issuable upon exercise of the underwriters' option to purchase additional shares of Class A common stock to cover overallotments, if any.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.



          The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated May 24, 2018

P R O S P E C T U S

          Shares

LOGO

Focus Financial Partners Inc.

Class A Common Stock



        This is Focus Financial Partners Inc.'s initial public offering. We are offering                shares of our Class A common stock.

        We expect the initial public offering price to be between $            and $            per share. Currently, no public market exists for our Class A common stock. We have applied to list our shares of Class A common stock on the NASDAQ Global Select Market under the symbol "FOCS."

        Investing in our Class A common stock involves risks that are described in the "Risk Factors" section beginning on page 29 of this prospectus.

        We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act and will therefore be subject to reduced reporting requirements. Please read "Prospectus Summary—Emerging Growth Company Status."



 
  Per Share   Total  

Initial public offering price

  $              $             

Underwriting discount

  $              $             

Proceeds, before expenses, to us(1)

  $              $             

(1)
We have agreed to reimburse the underwriters for certain FINRA-related expenses. Please read "Underwriting (Conflicts of Interest)."

        The underwriters may also exercise their option to purchase up to an additional                shares of our Class A common stock from us, at the initial public offering price less the underwriting discount, for 30 days after the date of this prospectus to cover overallotments, if any.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The shares of Class A common stock will be ready for delivery on or about                        , 2018.



Joint Book-Running Managers

Goldman Sachs & Co. LLC   BofA Merrill Lynch   KKR



BMO Capital Markets   RBC Capital Markets   SunTrust Robinson Humphrey



Co-Managers

Keefe, Bruyette & Woods
                     A Stifel Company
  Raymond James   William Blair

   

The date of this prospectus is                        , 2018.


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PROSPECTUS SUMMARY

    1  

RISK FACTORS

   
29
 

A LETTER FROM RUEDIGER ADOLF

   
55
 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

   
59
 

INTERNAL REORGANIZATION

   
60
 

USE OF PROCEEDS

   
66
 

DIVIDEND POLICY

   
67
 

CAPITALIZATION

   
68
 

DILUTION

   
69
 

SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

   
71
 

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

   
74
 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
84
 

BUSINESS

   
111
 

REGULATORY ENVIRONMENT

   
129
 

MANAGEMENT

   
131
 

EXECUTIVE COMPENSATION

   
136
 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

   
144
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   
152
 

DESCRIPTION OF CAPITAL STOCK

   
153
 

SHARES ELIGIBLE FOR FUTURE SALE

   
159
 

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

   
162
 

UNDERWRITING (CONFLICTS OF INTEREST)

   
166
 

LEGAL MATTERS

   
177
 

EXPERTS

   
177
 

WHERE YOU CAN FIND MORE INFORMATION

   
177
 

INDEX TO FINANCIAL STATEMENTS

   
F-1
 

GLOSSARY

   
A-1
 



        Neither we nor the underwriters have authorized anyone to provide you with information different from that contained in this prospectus and any free writing prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell shares of our Class A common stock and seeking offers to buy shares of our Class A common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time

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of any sale of the Class A common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

        This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. Please read "Risk Factors" and "Special Note Regarding Forward-Looking Statements."

Industry and Market Data

        Unless otherwise indicated, industry and market data used throughout this prospectus were obtained through company research, surveys and studies conducted by third parties and industry and general publications. Certain information contained in "Prospectus Summary" and "Business" is based on studies, analyses and surveys prepared by Cerulli Associates, Inc., Capgemini/RBC Wealth Management, IBISWorld Inc. and other third-party sources. The industry data presented herein involves uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors," "Special Note Regarding Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Trademarks and Trade Names

        We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks or trade names in this prospectus is not intended to, and does not, imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully before making an investment decision, including the information under the headings "Risk Factors," "Special Note Regarding Forward-Looking Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" and the historical and pro forma consolidated financial statements and the related notes thereto appearing elsewhere in this prospectus. The information presented in this prospectus assumes (i) an initial public offering price of $            per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus) and (ii) unless otherwise indicated, that the underwriters do not exercise their option to purchase additional shares of Class A common stock to cover overallotments, if any.

        Unless otherwise indicated or the context otherwise requires, all references in this prospectus to "we," "us," "our," the "Company," "Focus" and similar terms refer (i) for periods prior to giving effect to the reorganization transactions described under "Internal Reorganization," to Focus Financial Partners, LLC and its consolidated subsidiaries and (ii) for periods beginning on the date of and after giving effect to such reorganization transactions, to Focus Financial Partners Inc. and its consolidated subsidiaries. Also, unless otherwise indicated or the context otherwise requires, all information in this prospectus gives effect to the reorganization transactions. "Focus LLC" refers to Focus Financial Partners, LLC, a Delaware limited liability company and a consolidated subsidiary of ours following the reorganization transactions. The term "partner firms" refers to our consolidated subsidiaries engaged in wealth management and related services, the businesses of which are typically managed by the principals. The term "principals" refers to the wealth management professionals who manage the businesses of our partner firms pursuant to the relevant management agreement. The term "our partnership" refers to our business and relationship with our partner firms and is not intended to describe a particular form of legal entity or a legal relationship. For explanations of certain terms used in this prospectus, please read "Glossary" beginning on page A-1.


Our Company

        We are a leading partnership of independent, fiduciary wealth management firms operating in the highly fragmented registered investment advisor ("RIA") industry, with a footprint of over 50 partner firms across the country. We have achieved this market leadership by positioning ourselves as the partner of choice for many firms in an industry where a number of secular trends are driving RIA consolidation. Our partner firms primarily service high net worth individuals and families by providing highly differentiated and comprehensive wealth management services. Our partner firms benefit from our intellectual and financial resources, operating in a scaled business model with aligned interests, while retaining their entrepreneurial culture and independence.

        Our partnership is built on the following principles, which enable us to attract and retain high-quality wealth management firms and accelerate their growth:

    Entrepreneurship:  Emphasis on the entrepreneurial spirit, independence and unique culture of each partner firm.

    Fiduciary Standard:  Partnership with wealth management firms that are held to the fiduciary standard in serving their clients.

    Alignment of Interests:  Alignment of principals' interests with the interests of Focus through our differentiated partnership and economic model.

    Value-Add Program:  Empowerment of our partner firms through collaboration on strategy, growth and acquisition opportunities, marketing, technology and operational expertise, best practices and access to world-class intellectual resources and capital to fund expansion and acquisitions.

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        We were founded by entrepreneurs and began revenue-generating and acquisition activities in 2006. Since that time, we have:

    created a partnership of over 50 partner firms, the substantial majority of which are RIAs registered with the Securities and Exchange Commission (the "SEC") pursuant to the Investment Advisers Act of 1940 (the "Advisers Act");

    built a business with revenues of $662.9 million for the year ended December 31, 2017 and $196.2 million for the three months ended March 31, 2018;

    established an attractive revenue model whereby in excess of 90% of our revenues for the year ended December 31, 2017 and the three months ended March 31, 2018 were fee-based and recurring in nature;

    built a partnership model currently comprised of over 2,700 wealth management-focused principals and employees; and

    established a national footprint across the United States and expanded our international footprint into the United Kingdom, Canada and Australia.

        We are in the midst of a fundamental shift in the growing wealth management services industry. According to the Capgemini 2017 World Wealth Report (the "2017 World Wealth Report"), the population of high net worth individuals continues to grow globally and has reached record levels in the United States since 2010, which is driving increased demand for wealth management services. In addition, due to the significant increase in retirees in the United States, the industry is witnessing significant growth in the flow of retirement assets from company-sponsored plans into flexible investment accounts. For example, rollovers, primarily from employer-sponsored retirement plans, to traditional IRAs grew significantly from $114.0 billion in 1996 to $423.9 billion in 2014 according to The IRA Investor Profile: Traditional IRA Investors' Activity, 2007-2015 ICI Research Report (June 2017) by Sarah Holden and Steven Bass (the "June 2017 ICI Report"). Additionally, the delivery of wealth management services is moving from traditional brokerage, commission-based platforms to a fiduciary, open architecture and fee-based structure. This shift has resulted in a significant transfer of client assets and wealth management professionals out of traditional brokerage, commission-based platforms to independent wealth management practices. We believe that our leading partnership of independent, fiduciary wealth management firms positions us to benefit from these trends.

        The independent wealth management industry, including RIAs, is highly fragmented, which we believe enables us to continue our growth strategy of acquiring high-quality wealth management firms, directly and through acquisitions by our partner firms. We have a track record of enhancing the competitive position of our partner firms by providing them with access to the resources of our large organization. Our scale enables us to help our partner firms achieve operational efficiencies and ensure organizational continuity. Additionally, our scale, resources and value-added services increase our partner firms' ability to achieve growth through a variety of tactical, operational and strategic initiatives, as well as the consummation of their own acquisitions. As our existing partner firms benefit from these growth initiatives, we continue to focus on acquisitions of new partner firms.

        Our partnership is comprised of trusted professionals providing comprehensive wealth management services under a largely recurring, fee-based model, which differentiates our partner firms from the traditional brokerage platforms whose revenues are largely derived from commissions. We derive a substantial majority of our revenues from wealth management fees for investment advice, financial and tax planning, consulting, tax return preparation, family office services and other services. We also generate other revenues from recordkeeping and administration service fees, commissions and distribution fees.

        For the year ended December 31, 2017, we generated total revenues of $662.9 million, net loss of $48.4 million, Adjusted EBITDA of $145.2 million and Adjusted Net Income of $96.6 million. For the

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three months ended March 31, 2018, we generated total revenues of $196.2 million, net loss of $12.1 million, Adjusted EBITDA of $44.2 million and Adjusted Net Income of $28.3 million. Over the last three fiscal years, our total revenues, our net income, our Adjusted EBITDA and our Adjusted Net Income have changed at compounded annual growth rates ("CAGR") of 26.7%, (259.2)%, 28.9% and 20.0%, respectively. We expect our growth to continue as a result of the growth of our partner firms, attractive market and industry tailwinds and ongoing acquisition opportunities within the fragmented wealth management industry. For additional information regarding our non-GAAP financial measures, including a reconciliation of Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP financial measure, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business."

        The following chart shows key aspects of our differentiated business model versus the typical investment manager and broker dealer.

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Our Partnership Model

        Our differentiated partnership model has allowed us to grow and enhance our leadership position in the wealth management industry. The hallmarks of our model include:

    Selective Approach.  We are highly selective in choosing our partner firms and conduct extensive financial, legal, tax, operational and business due diligence. We evaluate a variety of criteria including the quality of the wealth management professionals, historical revenues and cash flows, the recurring nature of the revenues, compliance policies and procedures and the alignment of interests between wealth management professionals and clients. We focus on firms with owners who are committed to the long-term management and growth of their business.

    Alignment of Interests.  We have to date, with limited exceptions, acquired substantially all of the assets of the firms we chose to partner with but only a portion of the underlying economics in order to align the principals' interests with our own objectives. To determine the acquisition price, we first estimate the operating cash flow of the business based on current and projected levels of revenue and expense, before compensation and benefits to the selling principals or other individuals who become principals. We refer to the operating cash flow of the business as Earnings Before Partner Compensation ("EBPC") and to this estimate as Target Earnings ("Target Earnings"). In economic terms, we typically purchase only 40% to 60% of the partner firm's EBPC. The purchase price is a multiple of the corresponding percentage of Target Earnings and consists of cash and Focus LLC equity and the right to receive contingent consideration and may in the future include our Class A common stock. We refer to the corresponding percentage of Target Earnings on which we base the purchase price as Base Earnings ("Base Earnings"). We create downside protection for ourselves by retaining a cumulative preferred position in Base Earnings, with the excess of Base Earnings up to Target Earnings being retained by the principals via a management agreement as described below. We refer to our cumulative preferred position in Base Earnings as Acquired Base Earnings ("Acquired Base Earnings"). EBPC in excess of the Target Earnings is shared typically in accordance with the same economic percentages, creating an incentive for the principals to grow earnings above the Target Earnings.

    Entrepreneurial Management.  Our partner firms are primarily overseen by the principals who own a new management company formed concurrently with the acquisition. The newly formed operating subsidiary, the management company and the principals enter into a long-term management agreement pursuant to which the management company provides the personnel responsible for overseeing the day-to-day operations of the partner firm. The management company is entitled to management fees typically consisting of all EBPC in excess of Base Earnings up to Target Earnings, plus a percentage of EBPC in excess of Target Earnings. This ownership and management structure allows the principals to maintain an entrepreneurial spirit through autonomous day-to-day decision making, while gaining access to our extensive resources and preserving the principals' long-term economic incentive to continue to grow the business. The management company structure provides both flexibility to us and stability to our partner firms by permitting the principals to continue to build equity value in the management company as the partner firm grows and to control their internal economics and succession plans within the management company.

        Since 2006 when we began revenue generating and acquisition activities, we have grown to a partnership with over 50 partner firms. Acquisitions of partner firms to date have been structured as illustrated below, with limited exceptions. Subsidiary mergers at the partner firm level have been

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structured differently, and in the future we may structure acquisitions in foreign jurisdictions differently depending on legal and tax considerations.

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(1)
Focus LLC forms a wholly owned subsidiary.

(2)
In exchange for a combination of cash and Focus LLC equity and the right to receive contingent consideration, the operating subsidiary acquires substantially all of the assets of the target firm, which is owned by the selling principals, and becomes the successor firm. Following this offering, acquisition consideration may also include our Class A common stock.

(3)
The selling principals form a management company. In addition to the selling principals, the management company may include non-selling principals who become newly admitted in connection with the acquisition or thereafter.

(4)
The successor firm, the principals and the management company enter into a management agreement which typically has an initial term of six years subject to automatic renewals for consecutive one-year terms, unless earlier terminated by either the management company or us in certain limited situations. Under the management agreement, the management company is entitled to management fees typically consisting of all future EBPC of the successor firm in excess of Base Earnings up to Target Earnings, plus a percentage of any EBPC in excess of Target Earnings. Pursuant to the management agreement, the management company provides the personnel who conduct the day-to-day operations of the successor firm. Through the management agreement, we create downside protection for ourselves by retaining a cumulative preferred position in Base Earnings.


Our Market Opportunity

Overview of the Wealth Management Industry

        The market we serve is significant and expanding. The Financial Planning and Advice market in the United States, as defined by an IBISWorld report dated December 2017, is estimated to have a total revenue pool of $56.0 billion in 2017, up from $37.9 billion in 2012. Furthermore, the total revenue pool for the Financial Planning and Advice market is expected to reach $78.5 billion by 2023. The U.S. wealth management market is generally categorized into six distinct channels, including the RIA channel we focus on and five broker-dealer channels (independent broker-dealer, wirehouse, regional, bank and insurance). We believe that the RIA channel and channels with similar characteristics in other countries provide a superior structure through which to deliver wealth management services, which leads to attractive growth opportunities and a high-quality client base relative to other channels.

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        The high net worth population worldwide grew at a 7.2% annual rate from 2010 to 2016, according to the 2017 World Wealth Report. In addition, globally, the wealth of high net worth individuals is expected to grow at a 5.9% annual rate from 2016 to 2025, according to the same report. We believe this trend is increasing overall demand for wealth management services and provides an attractive underlying growth trajectory for our business. Within the larger wealth management industry, we have focused primarily on the United States to date. Between 2014 and 2016, the U.S. high net worth population increased at an annual rate of approximately 5.0% from 4.4 million to 4.8 million, which represents approximately 29.0% of the global high net worth population, according to the 2017 World Wealth Report.

Overview of the RIA Channel in the United States

        RIAs are generally focused on providing high net worth clients a full suite of wealth management services under a fee-based model. RIAs are registered with the SEC or a state's securities agency and therefore have a legal obligation to adhere to the fiduciary standard, whereas broker-dealers operate under a client suitability standard of conduct, which requires only that investment recommendations be based on a reasonable inquiry into a client's situation. In addition, while RIAs are required by the fiduciary standard to make full and fair disclosure to clients of all material facts, including any potential conflicts of interest, broker-dealers have more limited disclosure obligations. Lastly, whereas broker-dealers generally operate under a commission-based system, RIAs generally operate under a fee-based system, which leads to more recurring and visible revenue streams.

        In 2016, RIAs grew 6.5% to 36,959 total advisors, according to the Cerulli U.S. Advisor Metrics 2017 Report (the "Cerulli 2017 Advisor Report"). In addition, from 2007 to 2016, RIAs increased their share of total advisors across all channels from 7.0% to 11.9%. The number of advisors in the RIA channel is expected to reach 42,523 advisors with an advisor headcount share of 14.1% by 2021, based on estimates from the Cerulli 2017 Advisor Report. In addition to a growing number of advisors, the RIA channel is fragmented with 14,693 RIAs as of December 31, 2016, according to the Cerulli 2017 Advisor Report. As a leading partnership of RIAs, we believe this gives us a competitive advantage for further expansion in this growing, yet fragmented, channel.

Key Trends Driving Growth of RIAs and Hybrid RIA Firms

        We believe there are several key factors driving the growth of RIAs and hybrid RIA firms:

    Advisors Moving Toward Independent Advisor Model.  As of December 31, 2016, 20.7% of advisors across all channels worked for RIAs or hybrid RIA firms (those firms that can act either in a fiduciary-based advisory capacity or a suitability-based broker capacity), collectively, and such percentage is expected to grow to 23.2% by the end of 2021, according to the Cerulli U.S. RIA Marketplace 2017 Report (the "Cerulli 2017 RIA Report"). One of the key factors driving the shift of financial advisors to the RIA channel is the ability to garner a greater share of the economics associated with the wealth management services they provide. Advisors also enjoy the increased autonomy associated with running their own firms as they can offer their customers a wider array of investment strategies and services, all of which are aligned with the clients' best interest through the fiduciary standard.


    From time to time, we offer teams of wealth management professionals at traditional brokerages and wirehouses with attractive track records and books of business access to the Focus Independence program, which is designed to actively help teams of wealth management professionals transition from traditional brokerages and wirehouses to the RIA model by providing assistance with business planning, staffing and transition management to minimize disruption and best position them for future growth.

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    Increased Demand for Independent Advice.  Recent market trends indicate a preference by clients for the independent wealth management advice provided by RIAs and hybrid RIA firms. Wirehouse asset market share fell from 42.6% to 36.1% between 2007 and 2016 and is expected to fall further to 32.5% by 2021, according to the Cerulli 2017 Advisor Report. Conversely, RIAs and hybrid RIA firms saw an increase in their collective asset market share from 16.8% to 22.7% between 2007 and 2016 and are expected to have an asset market share of 25.0% by 2021, according to the Cerulli 2017 Advisor Report. As a leading partnership of RIAs, we believe we are poised to benefit from such trends.

    Lack of Succession Planning in RIA Channel.  According to the Cerulli 2017 Advisor Report, 20% of all RIAs are unsure who their practice successor will be. The Cerulli 2017 Advisor Report found that the average age of an RIA advisor was 53.3 years and 24% of RIA advisors planned to exit the industry in the next nine years. We believe we are well-positioned to capture this growing need for RIAs to prepare their firms for the next generation of leadership through Focus Successions, which consists of a standardized agreement pursuant to which an RIA can transition its business upon the retirement of its principal advisors or the occurrence of a key person event to one of our existing partner firms.

    Projected Growth of Managed Accounts.  The United States is in the midst of a generational shift where baby boomers, born between 1946 and 1964, are beginning to retire. The U.S. population aged 65 years and over is expected to increase by 72% from 2015 to 2040, increasing from 14.9% to an estimated 21.7% of the total U.S. population in 2040, according to data from the U.S. Census Bureau. Accompanying this shift is an expected increase in demand for wealth management services as assets are moved out of 401(k) accounts and company-sponsored plans into managed accounts. This influx of retirement assets into flexible investment accounts represents a growth opportunity for the independent wealth management sector, specifically the growing RIA channel.

Expanding International Opportunities

        We believe that there are similar business and regulatory trends in several key international jurisdictions that are driving wealth management professionals toward independent, fee-based business models consistent with our partner firms' approach. In particular, in addition to targeting the RIA-led wealth management industry in the United States, we believe the heightened regulatory scrutiny and proliferating awareness of the fiduciary standard for wealth management as well as the growing population of high net worth clients in various regions globally will provide us with an increasing number of acquisition targets abroad. We have identified Canada, the United Kingdom, Western Europe and Australia as attractive markets where we expect our philosophy of fiduciary alignment and independence to resonate with potential partner firms. We also believe that Asia in the medium term is an attractive market for wealth management services and presents growth opportunities in the future given the growth of the high net worth population in the region. We believe that we are well-positioned to take advantage of the growth opportunities in these and other international markets.

    International Regulatory Changes Favor Our Model.  Regulators across the globe are continuing to focus on, and to increasingly mandate, the provision of independent advice by wealth management professionals. In the United Kingdom, the Retail Distribution Review ("RDR") has created a set of rules clarifying the independence, compensation and professional standards for advisors. In particular, the RDR rules ban the payment of commissions by third-party managers for sales of investment products by advisors. These rules provide a strong incentive for advisors to adopt fee-based models. A similar prohibition is in the process of being adopted across the European Union with the implementation of the Markets in Financial Instruments Directive II ("MiFID II"), which was entered into law in July 2014 and is in the process of being adopted by member states. A similar regulatory initiative in Australia, the Future of Financial Advice

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      reforms, became mandatory in July 2013 and provides formal guidelines that provide structural tailwinds for the independent wealth management model.

    Ongoing Wealth Creation in Asia.  The Asia-Pacific region experienced 8.2% growth in high net worth wealth in 2016 to a total of $18.8 trillion, according to the 2017 World Wealth Report. The Asia-Pacific region surpassed North America in high net worth wealth in 2015 according to the same study. We believe that the rate of wealth creation in Asia will provide opportunities for fiduciary wealth management that aligns with our model. Additionally, jurisdictions across Asia, including China, are increasingly opening up to international ownership and participation in the provision of wealth management advice.

        Our future international acquisitions may not be structured like our typical partner firm acquisitions. For example, we have a minority equity investment in Australia. A variety of structures may be used for future international investments and acquisitions.


Our Competitive Strengths

        As a leading partnership of independent, fiduciary wealth management firms led by entrepreneurs, we believe the following strengths provide us with a sustainable competitive advantage:

A Leading Partnership of Fiduciary Wealth Management Firms

        We strategically built a leading partnership of independent, fiduciary wealth management firms led by entrepreneurs through a unique, disciplined and proven acquisition strategy. Our partnership delivers key innovative features that clients are increasingly seeking in today's environment, such as adoption of the fiduciary standard and a lack of dependence on cross-selling and commission-based revenues. Our position as a large-scale partnership of wealth management firms provides significant tangible benefits to our partner firms, including acquisition opportunities. Today, we have over 50 partner firms that operate under the fiduciary standard with open-architecture access. Our model allows our partner firms to use each other as business development resources and drives innovation through Centers of Competence, our program through which we share best practices among our partner firms and provide them with value-added services. We believe we have a proven model for transitioning new wealth management firms into the partnership with minimal disruption to the operations of the firm.

Unique Value Proposition for Entrepreneurial Wealth Management Professionals

        We are actively involved in providing strategic advice and other value-added services to our partner firms without compromising their autonomy, client service or culture. As early as the acquisition due diligence process, we identify areas where we believe we can add value to a potential partner firm, and upon acquisition, we assign a relationship leader to each partner firm who is responsible for collaborating with that firm to drive business strategy and growth. Each relationship leader is tasked with intimately understanding the partner firm, identifying opportunities for growth and coordinating our value-added services to assist that partner firm in accelerating its growth. In the interest of emphasizing the independence of our partner firms, we do not impose business decisions on them but rather consult and advise.

        Our operating model ensures financial alignment between us and our partner firms allowing each of us to benefit from the adoption of new value add services and growth strategies. We have a team of approximately 70 professionals who support our partner firms by providing value-added services including marketing and business development support, advisor coaching and development and structuring compensation and incentive models along with career path planning, succession planning advice, operational and technology expertise, legal and regulatory support and providing negotiating leverage with vendors. Our value-added services also include acquisition opportunities for our partner

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firms through a proactive outreach program, structuring transactions and providing guidance to partner firms to facilitate their integration into our partnership. Additionally, we offer offsite meetings, seminars and other opportunities for partner firms to learn and adopt best practices. We host semiannual meetings of our partner firms, as well as periodic summits for the chief investment officers, chief compliance officers, chief operating officers and chief marketing officers of our partner firms where our partner firms can gather and share industry expertise and business development practices. Our partner firms are encouraged to share best practices regularly in order to enhance their collective ability to better serve their clients. We believe the strong growth across our partner firms is evidence of the impact of our value-added services.

Proven Acquisition Expertise

        Growth through acquisitions of new partner firms by us and acquisitions by our partner firms is integral to and a core competency of our business. Since 2006, we have completed over 140 acquisitions, both directly and through acquisitions by our partner firms. In the past three years, we have averaged approximately 21 transactions per year. Our senior leadership team, along with all of our other headquarters personnel, spend a significant portion of their time on sourcing and executing acquisitions. Our value-added services professionals have acquisition, legal, financial, tax, compliance and operational experience and are devoted to our acquisition strategy. We are disciplined about both the types of wealth management firms we acquire and the terms at which we are willing to transact. Our areas of expertise include:

    Sourcing.  We have an experienced team of professionals, including our co-founders and our business development associates, who have established deep industry relationships, which were developed through meetings with hundreds of wealth management professionals and attendance at industry events. Over the past 10+ years, through data analysis and research and with the benefit of well-established industry relationships, our co-founders and business development associates have developed a pipeline of potential acquisitions of new partner firms. Our team also assists in identifying potential acquisition targets for our partner firms. In addition, we have relationships with many recruiting and investment banking firms in our industry, which serves as an additional source for acquisition opportunities.

    Comprehensive due diligence.  Having grown to a partnership with over 50 partner firms and conducted due diligence on many more target firms, we have developed expertise in identifying the highest quality wealth management firms. Our comprehensive due diligence process includes distinct qualitative and quantitative factors and, over time, we have developed a number of proprietary parameters to screen acquisition candidates and identify ways to add value to a target firm. Our partner firms benefit from this same level of expertise when we are identifying potential acquisitions on their behalf.

    Structure.  Our acquisition structure aligns our interests with the interests of the principals by sharing EBPC of our partner firms with them. While we have to date, with limited exceptions, acquired substantially all of the assets of the firms we chose to partner with, as a result of the management agreement, the principals oversee the day-to-day operations of the partner firm, which promotes their entrepreneurial mindset.

    Financing.  We benefit from access to significant capital resources which we believe provides us a competitive advantage. As of March 31, 2018, total capacity under our first lien revolving credit facility was $247.5 million, which allows us to execute acquisitions with speed and certainty.

        We believe that our disciplined acquisition strategy allows us to attract and execute acquisitions of high-quality, fiduciary wealth management firms that continue to support our growth. This is demonstrated by our track record to date, with over 50 partner firms and numerous acquisitions executed by our partner firms.

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Attractive Financial Model

        Our attractive, differentiated financial model is evidenced by our proven track record of strong financial performance. Since 2008, we have generated a revenue growth CAGR of approximately 20%, achieved through executing our balanced strategy of acquiring new partner firms and supporting organic growth at our existing partner firms. In our most recent year ended December 31, 2017, our revenue grew by 36.6%, we had a net loss, our Adjusted EBITDA grew by 40.9% and our Adjusted Net Income grew by 24.6%, each as compared to the prior year. Further, our business generated net income (loss) margins of approximately 2.4%, 3.2% and (7.3)% for the years ended December 31, 2015, 2016 and 2017, respectively, and Adjusted EBITDA margins of approximately 20% for each of the years ended December 31, 2015, 2016 and 2017 and is capital light given our limited working and regulatory capital requirements, which together create substantial operating leverage and drive free cash flow generation. We believe our financial profile provides the flexibility to continue to execute our various growth initiatives.

        Our attractive financial model is further supported by certain elements that insulate our revenue and earnings streams from operational and market volatility:

    Variable expense nature of management fees.  As a result of our contractual arrangements under our management agreements, 100% of management fees are variable expenses. Management fees are one of our largest operating expenses. Additionally, pursuant to the contractual terms of our management agreements, we have a cumulative preferred position in Base Earnings. This structural downside protection serves as a safeguard in our earnings from potential variability in the operating performance of our partner firms.

    Fee-based and recurring revenues.  Our revenues are substantially fee-based and recurring in nature, including greater than 90% of our revenues for the year ended December 31, 2017 and the three months ended March 31, 2018. We believe that this provides us with a high degree of revenue stability and visibility into future earnings, and differentiates us from traditional brokerage-based platforms whose revenues are largely derived from commissions and thus more sensitive to broader market trends.

    Diversified investment classes.  Our clients have portfolios that are allocated across equity, fixed income and other investment classes.

    Client focus.  Clients increase their reliance on our partner firms for advice during times of market volatility.

Experienced Management Team with Proven Execution Track Record

        Our management team, which includes our co-founders, has played a significant role in building the business and has a deep, fundamental understanding of the company. Our executives have strong relationships in the wealth management industry and are actively involved in the day-to-day operations of the business and in sourcing acquisitions. Prior to joining Focus, members of our management team developed financial services and consultative expertise and leadership capabilities at organizations such as McKinsey & Company, The Boston Consulting Group, American Express ("AMEX"), Merrill Lynch, BlackRock and PricewaterhouseCoopers. Our management team is closely aligned with shareholders' interests as a result of its significant equity ownership in us.

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Our Growth Strategy

        We believe we are well-positioned to take advantage of favorable trends in the wealth management industry, including the migration of wealth management professionals from traditional brokerage, commission-based platforms to a fiduciary, open-architecture and fee-based structure. We plan to grow our business through the growth of our existing partner firms and expansion of our partnership.

Growth of Our Existing Partner Firms

    High-Quality, Growth-Oriented Partner Firms.  Our goal has been and continues to be to acquire high-quality, entrepreneurial wealth management firms that have built their businesses through a proven track record of growth. We believe that our partner firms will continue to take advantage of the shift in the market share of client assets to the RIA space and grow organically through acquisitions of wealth management practices and customer relationships, attracting new clients, additions of new wealth management professionals, increasing the amount of assets from existing clients and market-based growth over time. The economic arrangements put in place at the time of acquisition through our management agreements further incentivize the principals of our partner firms to continue executing on their growth plans.

    Value-Added Services.  We have a team of approximately 70 professionals who support our partner firms by providing value-added services, including marketing and business development support, advisor coaching and development and structuring compensation and incentive models along with career path planning, succession planning advice, operational and technology expertise, legal and regulatory support and providing negotiating leverage with vendors. We assign a relationship leader to each partner firm who is tasked with coordinating our value-added services to assist that partner firm in accelerating its growth. These services are provided to our partner firms at no additional cost. Our partner firms have access to the resources of a large organization, which ultimately enhances their operations, enabling them to better serve their clients.

    Acquisitions by Our Partner Firms.  We support acquisitions of wealth management practices and customer relationships by our partner firms to further expand their businesses. Partner firms pursue acquisitions for a variety of reasons, including geographic expansion, acquisition of new talent and/or specific expertise and succession planning. Acquisitions by our partner firms allow them to add new talent and services to better support their client base while simultaneously capturing synergies from the acquired businesses. We believe there are currently over 5,000 firms in the United States that are suitable targets for our partner firms. We have an experienced team of professionals with deep industry relationships to assist in identifying potential acquisition targets for our partner firms. Through our proprietary in-house sourcing effort, we frequently identify acquisition opportunities for our partner firms. Additionally, many of our partner firms are well-known in the industry and have developed extensive relationships. In recent years, principals and employees of our partner firms have identified attractive merger candidates, and we believe this trend will continue as our partner firms continue to build scale.

    Succession Planning for Firms Outside of Our Partnership.  We enable unaffiliated wealth management firms to better plan for changes in personnel and unanticipated disruptions through Focus Successions, which consists of a standardized agreement for a third-party wealth management firm to transition its business upon retirement or a key person event to one of our existing partner firms. We facilitate this process by identifying and sourcing third-party firms in need of succession planning and matching them with a compatible partner firm within our partnership. Typically, we select an existing partner firm that is in the same geographical region and offers similar client services as the third-party firm. This is a unique opportunity to build acquisition pipelines for our partner firms.

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Acquisitions of New Partner Firms

        Since inception, a fundamental aspect of our growth strategy has been the acquisition of high-quality, entrepreneurial wealth management firms to expand our partnership. We believe that there are over 500 firms in the United States that are high-quality targets for future acquisitions. While most of our acquisitions have taken place in the United States, we see opportunities in multiple international locations where market and regulatory trends toward the fiduciary standard and open-architecture access mirror those occurring in the United States. We have already begun expansion into the United Kingdom, Canada and Australia.


Risks Related to Our Partnership Model and Growth Strategy

        We face risks related to our partnership model and growth strategy. You should carefully read the section of this prospectus entitled "Risk Factors" for an explanation of these risks before investing in our Class A common stock. The principal risks we face related to our partnership model and growth strategy include:

    The wealth management industry is very competitive.

    Our success depends, in part, on our ability to make successful acquisitions.

    Acquired businesses may not perform as expected, leading to an adverse effect on our earnings and revenue growth.

    Our growth strategy depends, in part, upon continued growth from our existing partner firms. However, the significant growth we have experienced may be difficult to sustain in the future.

    Our acquisition due diligence process may not reveal all facts that are relevant in connection with an acquisition, which could subject us to unknown liabilities.

    The success of Focus Independence depends upon our ability to lift out teams of wealth management professionals from traditional brokerages and wirehouses.

    We may encounter complications in implementing Focus Successions related to transitioning and administering client assets and obtaining required client consents.

    We may face operational risks associated with expanding internationally.

    Our partner firms' autonomy limits our ability to alter their management practices and policies, and our dependence on the principals who manage the businesses of our partner firms may have an adverse effect on our business.

    We rely on our key personnel and principals.

    If a management company terminates its management agreement with us, our financial condition and results could be negatively affected.

    If our partner firms are unable to maintain their client-oriented, fiduciary-minded culture or compensation levels for wealth management professionals, they may be unable to attract, develop and retain talented wealth management professionals, which could negatively impact their financial results and their ability to grow.


Our Structure and Reorganization

Summary of Offering Structure

        This offering is conducted through an "Up-C" structure, which is often used by partnerships and limited liability companies when they go public. An Up-C structure allows the equity holders in an

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entity that is treated as a partnership for U.S. federal income tax purposes to retain and realize tax benefits associated with their continued ownership interest following an initial public offering.

        In connection with the closing of this offering, we will enter into the Fourth Amended and Restated Operating Agreement of Focus LLC (the "Fourth Amended and Restated Focus LLC Agreement"). Following this offering and the reorganization transactions described below, Focus will be a holding company and its sole material asset will be a membership interest in Focus LLC. Focus will be the sole managing member of Focus LLC, will be responsible for all operational, management and administrative decisions of Focus LLC and will consolidate the financial results of Focus LLC and its operating subsidiaries. All other membership interests in Focus LLC will be non-voting.

        Investors in this offering will purchase shares of our Class A common stock. Focus will use a portion of the proceeds to purchase outstanding Focus LLC units from certain existing owners other than our private equity investors (as defined below). In addition, certain existing owners will exchange all or a portion of their Focus LLC units for shares of our Class A common stock and, in some cases, receive either compensatory stock options or non-compensatory stock options and cash. Certain existing owners will continue to hold Focus LLC units representing economic, non-voting interests in Focus LLC and receive shares of our Class B common stock.

        Purchasers of our Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of Class A common stock for accounting purposes. After giving effect to the sale of shares of Class A common stock in this offering and further assuming the receipt of the estimated net proceeds (assuming the midpoint of the price range set forth on the cover of this prospectus and after deducting the underwriting discount and estimated offering expenses payable by us), our adjusted pro forma net tangible book value as of March 31, 2018 would have been approximately $             million, or $            per share of Class A common stock. This represents an immediate increase in the net tangible book value of $            per share to our existing owners and immediate dilution (i.e., the difference between the offering price and the adjusted pro forma net tangible book value after this offering) to new investors purchasing shares of Class A common stock in this offering of $            per share. Please read "Risk Factors—Risks Relating to the Offering and Our Class A Common Stock—Investors in this offering will experience immediate and substantial dilution of $            per share." and "Dilution."

        The Class A and Class B common stock will generally vote together as a single class on all matters submitted to a vote of shareholders. The Class B common stock will not have any economic rights. Upon completion of this offering (assuming no exercise of the underwriters' option to purchase additional shares), existing owners, including our private equity investors and other shareholders, will own approximately      % of our Class A common stock (representing      % of the economic interest and      % of the voting power). The continuing owners will own 100% of our Class B common stock (representing 0% of the economic interest and    % of the voting power).

Reorganization Transactions

        In connection with this offering, we will effect an internal reorganization, which we refer to as the "reorganization transactions." The existing equity interests in Focus LLC consist of convertible preferred units, common units and incentive units. Each incentive unit has a hurdle amount, which is similar to the exercise price of a stock option. The owners of existing Focus LLC units, whom we refer to as the "existing owners," primarily include (i) affiliates of Stone Point Capital LLC (together with its affiliates, "Stone Point"), Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, "KKR") and Centerbridge Partners, L.P., whom we refer to as our "private equity investors," (ii) members of management, (iii) current and former principals and (iv) current and former employees of us and our partner firms.

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        We will implement the following steps in connection with this offering:

    Focus LLC will purchase, utilizing proceeds from existing working capital, all common units held by existing owners who are not accredited investors, as defined by Rule 501 of Regulation D, at a purchase price per unit equal to 1.25 times the gross IPO price. We refer to the initial public offering price per share of Class A common stock as the "gross IPO price."

    Focus LLC will accelerate vesting of all unvested incentive units held by existing owners who are not accredited investors and convert the incentive units of each such holder into a number of common units equal to (i) the number of such incentive units times the gross IPO price, minus the aggregate hurdle amount of such incentive units, divided by (ii) the gross IPO price. We refer to the resulting number of common units as the "appropriate conversion number." Focus LLC will then purchase all common units issued upon such conversion at a purchase price per unit equal to 1.25 times the gross IPO price.

    We refer to existing owners who are accredited investors and hold fewer than 85,000 common units and incentive units in the aggregate as "mandatorily exchanging owners." We will first convert all vested and unvested incentive units of mandatorily exchanging owners into the appropriate conversion number of vested and unvested common units, respectively. Mandatorily exchanging owners may sell up to 100% of their vested common units (after giving effect to such conversion) to Focus at the net IPO price, subject to cut-backs depending on the proceeds available from this offering. We refer to the initial public offering price per share of Class A common stock, less the underwriting discount, as the "net IPO price." Unless a mandatorily exchanging owner elects to sell all of its vested common units (after giving effects to such conversion), such mandatorily exchanging owner must sell at least 10,000 vested common units (after giving effect to such conversion). The remaining vested and unvested common units of a mandatorily exchanging owner will be exchanged for an equal number of shares of vested Class A common stock and unvested Class A common stock, which will vest in three equal installments on December 31, 2018, 2019 and 2020, respectively. Mandatorily exchanging owners of vested common units issued upon conversion of vested incentive units and not sold will also receive (i) vested non-compensatory stock options to purchase a number of shares of Class A common stock equal to (A) the number of vested incentive units that were converted into such vested common units minus (B) the number of shares of vested Class A common stock issued in such exchange and (ii) cash in an amount equal to 65% of the fair market value of such non-compensatory stock options, as determined by us. Mandatorily exchanging owners of unvested common units issued upon conversion of unvested incentive units and not sold will also receive unvested compensatory stock options, which will vest in three equal installments on December 31, 2018, 2019 and 2020, to purchase a number of shares of Class A common stock equal to (i) the number of unvested incentive units that were converted into such unvested common units minus (ii) the number of shares of unvested Class A common stock issued in such exchange. All of the foregoing stock options will have a term of ten (10) years and an exercise price per share of Class A common stock equal to the gross IPO price.

    Existing owners who are accredited investors and hold 85,000 or more common units and incentive units in the aggregate may sell up to 100% of their vested common units and vested incentive units (after conversion into the appropriate conversion number of common units) to Focus at the net IPO price, subject to cut-backs depending on the proceeds available from this offering. Unless such existing owner elects to sell all of its vested common units and vested incentive units (after conversion into the appropriate conversion number of common units), such existing owner must sell at least 10,000 vested common units and vested incentive units (after conversion into the appropriate conversion number of common units). These existing owners may also elect to exchange all or a portion of their remaining common units and incentive units on the following terms: (i) common units will be exchanged for an equal number of shares of

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      Class A common stock, (ii) vested incentive units will be converted into the appropriate conversion number of vested common units and exchanged for an equal number of shares of vested Class A common stock and (iii) unvested incentive units will be converted into the appropriate conversion number of unvested common units and exchanged for an equal number of shares of unvested Class A common stock, which will vest in three equal installments on December 31, 2018, 2019 and 2020. We refer to existing owners who elect such exchange as "optionally exchanging owners." Optionally exchanging owners may elect to exchange a portion of their common and incentive units only if they exchange at least 25,000 common units and incentive units in the aggregate and, after any elective sale and such exchange, they continue to hold at least 25,000 common units and incentive units in the aggregate in Focus LLC following this offering. These existing owners will continue to hold their common units and incentive units remaining after any such sale or exchange in Focus LLC.

    We refer to direct or indirect owners of convertible preferred units that are treated as corporations for U.S. federal income tax purposes as "blockers". All outstanding convertible preferred units will be converted into common units on a one-for-one basis. The common units held by certain affiliates of our private equity investors will be distributed to their owners, some of which are blockers. Each blocker will then merge with a separate newly formed subsidiary of Focus, with the blocker as the surviving entity. Each owner of each blocker (a "blocker owner") will receive consideration in the merger equal to one share of Class A common stock for each common unit held.

    The continuing owners affiliated with certain of our private equity investors will transfer a portion of their common units to Focus in exchange for an equal number of shares of Class A common stock. We refer to such private equity investors, solely with respect to the Class A common stock held by them following the reorganization transactions, as the "PE exchanging owners," and to mandatorily exchanging owners, optionally exchanging owners, and PE exchanging owners together as "exchanging owners."

    We will not issue any fractional shares of Class A common stock or common units in the reorganization transactions.

        We refer to existing owners who will hold common units or incentive units in Focus LLC after the reorganization transactions, including common units converted from convertible preferred units, as "continuing owners." In connection with this offering, Focus will issue shares of its Class B common stock to the continuing owners who hold vested common units in exchange for their assignment to Focus of their voting rights in Focus LLC. Each such owner will receive one share of Class B common stock for each vested common unit held. Continuing owners holding unvested common units will receive Class B common stock only upon vesting of such units. Continuing owners holding incentive units will not receive any Class B common stock.

        Shares of Class B common stock will not entitle their holders to any economic rights. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law. Each share of Class B common stock will entitle its holder to one vote. We do not intend to list the Class B common stock on any stock exchange. Continuing owners holding unvested common units will not have any voting rights until such units vest. Continuing owners holding incentive units will not have any voting rights.

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Structure Upon Completion of Offering

        From the proceeds received in this offering after deducting the underwriting discount and estimated offering expenses payable by us:

    Focus will pay $           million to mandatorily exchanging owners of vested incentive units, pay $             million to exchanging owners who elect to sell their Focus LLC units and contribute $          million to Focus LLC (or $             million if the underwriters exercise their option to purchase additional shares in full) in exchange for common units.

    Focus LLC will use $             million of such contribution amount to reduce indebtedness under our credit facilities.

    The remaining $             million of such contribution amount (or $             million if the underwriters exercise their option to purchase additional shares in full) will be used by Focus LLC for acquisitions and general corporate business purposes and to pay the expenses of this offering.

        Upon completion of the reorganization transactions and this offering:

    The outstanding capitalization of Focus will be as follows:

              shares of Class A common stock (or                    shares of Class A common stock if the underwriters exercise their option to purchase additional shares in full) held by investors in this offering;

              shares of Class A common stock held by the exchanging owners and blocker owners;

              shares of Class B common stock held by the continuing owners;

    vested non-compensatory stock options to purchase          shares of Class A common stock at the gross IPO price issued to mandatorily exchanging owners of vested incentive units; and

    unvested compensatory stock options to purchase          shares of Class A common stock at the gross IPO price granted to mandatorily exchanging owners of unvested incentive units.

    The outstanding capitalization of Focus LLC will be as follows:

              common units held by Focus;

              common units held by the continuing owners; and

              incentive units held by the continuing owners, which will be convertible into                        common units (assuming an offering price at the midpoint of the range on the cover of this prospectus) in connection with the exercise of an exchange right, as described below.

    The combined voting power in Focus will be as follows:

              % for investors in this offering (or        % if the underwriters exercise their option to purchase additional shares in full) who will hold shares of Class A common stock;

              % for the exchanging owners and blocker owners (or        % if the underwriters exercise their option to purchase additional shares in full) as a result of their holding shares of Class A common stock; and

              % for the continuing owners holding vested common units in Focus LLC and a corresponding number of shares of Class B common stock.

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        Each unitholder of Focus LLC (other than Focus) will, subject to certain limitations, have the right to cause Focus LLC to redeem all or a portion of its vested common units and vested incentive units, which we refer to as an "exchange right." Upon an exercise of an exchange right with respect to vested incentive units, such incentive units will first be converted into a number of common units that takes into account the then-current value of the common units and such incentive units' aggregate hurdle amount. Upon an exercise of an exchange right with respect to vested common units, and immediately after the conversion of vested incentive units into common units as described in the preceding sentence, Focus LLC will acquire each tendered common unit for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions, or (ii) an equivalent amount of cash. In addition, in connection with any redemption of vested common units (other than common units received upon a conversion of incentive units as described in this paragraph), the corresponding shares of Class B common stock will be cancelled. Alternatively, upon the exercise of any exchange right, Focus (instead of Focus LLC) will have the right to acquire each tendered common unit (and corresponding share of Class B common stock, as applicable) from the exchanging unitholder for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions, or (ii) an equivalent amount of cash, which we refer to as our "call right." The exchange rights will be subject to certain limitations and restrictions intended to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement."

Liquidity Rights and Limitations

        All existing owners will, subject to certain exceptions, be restricted from selling or transferring any shares of Class A common stock or any other of our equity securities for 180 days after the date of this prospectus. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement—Transfer of Securities" and "Underwriting (Conflicts of Interest)—No Sales of Similar Securities."

        Following the expiration of this 180-day period and except as otherwise permitted by the Fourth Amended and Restated Focus LLC Agreement, continuing owners will be restricted in exchanging Focus LLC units beneficially owned by them at the closing of this offering, such that they may exchange only up to one-third of such beneficially owned units per year, with certain carry-forward rights, and subject to certain exceptions, all as described below. The foregoing volume restrictions will apply to the existing owners affiliated with our private equity investors ("PE Holders") as an aggregate limitation on their ability to sell Focus LLC units or the shares of Class A common stock received in connection with the reorganization transactions.

        Except for certain additional liquidity rights provided under the registration rights agreement described below and except as otherwise permitted by the Fourth Amended and Restated Focus LLC Agreement, continuing owners will only be permitted to exercise their exchange rights on quarterly exchange dates and with respect to one-twelfth of the units held by them at the closing of this offering, with an ability to carry forward unused exchange rights to subsequent exchange dates. The foregoing volume restrictions will apply to the PE Holders as an aggregate limitation on their ability to sell Focus LLC units or the shares of Class A common stock received in connection with the reorganization transactions.

        Pursuant to a registration rights agreement, we will file a shelf registration statement to permit the resale of shares of Class A common stock held by PE Holders or issuable upon the exercise of exchange rights by continuing owners as soon as practicable following the one year anniversary of this offering.

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        The PE Holders will have the right to demand up to three secondary underwritten offerings per year. We may initiate one additional underwritten offering per year for the benefit of the other continuing owners.

        The PE Holders and the other continuing owners may have participation rights with respect to any such underwritten offerings. We may also participate on a primary basis and issue and sell shares of our Class A common stock for our own account. We will use the proceeds from any such offering to purchase outstanding Focus LLC units from continuing owners and pay related fees and expenses. In the event of any underwriter cutbacks, all participating holders will be treated equally and included pro rata based on their ownership of registrable shares at the closing of this offering.

        The PE Holders and the other continuing owners may also have piggyback registration rights with respect to other underwritten offerings by us under certain circumstances.

        We expect that future unitholders in certain instances may also be granted registration rights in connection with future acquisitions by Focus LLC, but on terms that are not superior to the registration rights of the continuing owners. Please read "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

        In addition, continuing owners will be subject to certain transfer restrictions under the Fourth Amended and Restated Focus LLC Agreement, which will be entered into in connection with the closing of this offering, intended to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes.

Tax Receivable Agreements

        Focus's acquisition (or deemed acquisition for U.S. federal income tax purposes) of Focus LLC units in connection with this offering or pursuant to an exercise of an exchange right or the call right is expected to result in adjustments to the tax basis of the tangible and intangible assets of Focus LLC and such adjustments will be allocated to Focus. Moreover, following Focus's acquisition or deemed acquisition of Focus LLC units and of the blockers, Focus will be allocated adjustments to the tax basis of the tangible and intangible assets of Focus LLC as a result of the acquisition in July 2017 of convertible preferred units by our private equity investors and certain of the blockers owned by our private equity investors. These adjustments would not have been available to Focus absent its acquisition or deemed acquisition of Focus LLC units or its acquisition of the blockers and are expected to reduce the amount of cash tax that Focus would otherwise be required to pay in the future.

        In connection with the closing of this offering, Focus will enter into two tax receivable agreements (the "Tax Receivable Agreements"), the first of which will be entered into with the blocker owners and the PE Holders, and the second of which will be entered into with the continuing owners who are not PE Holders and certain other existing owners (the parties to the two agreements collectively, the "TRA holders"). The term of each Tax Receivable Agreement will commence upon the closing of this offering and will continue until all tax benefits that are subject to such Tax Receivable Agreement have been utilized or expired, unless we experience a change of control (as defined in the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), and we make the termination payments specified in the Tax Receivable Agreements. The Tax Receivable Agreements generally provide for the payment by Focus to each TRA holder of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that Focus actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after this offering as a result of, as applicable to the relevant TRA holder, (i) certain increases in tax basis that occur as a result of Focus's acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA holder's units in connection with this offering or pursuant to the exercise of an exchange right or the call right,

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(ii) the increases in tax basis relating to the July 2017 acquisition by our private equity investors that will be available to Focus as a result of its acquisition of the blockers in connection with this offering and (iii) imputed interest deemed to be paid by Focus as a result of, and additional tax basis arising from, any payments Focus makes under the relevant Tax Receivable Agreement. We will retain the benefit of the remaining 15% of these cash savings. For purposes of the Tax Receivable Agreements, cash savings in tax generally are calculated by comparing Focus's actual tax liability (using the actual applicable U.S. federal income tax rate and an assumed combined state and local income and franchise tax rate) to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the Tax Receivable Agreements. In addition, if we elect to terminate the Tax Receivable Agreements early, or upon certain mergers, asset sales, other forms of business combinations or other changes of control, Focus's (or Focus's successor's) tax savings under the Tax Receivable Agreements would be based on certain assumptions, including the assumption that Focus has sufficient taxable income to fully utilize the tax benefits covered by the Tax Receivable Agreements. Please read "Certain Relationships and Related Party Transactions—Tax Receivable Agreements" for a description of the Tax Receivable Agreements generally and for a discussion of circumstances in which Focus will be deemed to acquire units or realize net cash tax savings. We expect that future unitholders may become party to one or more tax receivable agreements entered into in connection with future acquisitions by Focus LLC.

        Because Focus is a holding company with no operations of its own, Focus's ability to make payments under the Tax Receivable Agreements is dependent on the ability of Focus LLC to make distributions to Focus in an amount sufficient to cover its obligations under the Tax Receivable Agreements. See "Risk Factors—Risks Related to Our Internal Reorganization and Resulting Structure—Focus is a holding company. Focus's sole material asset after completion of this offering will be its equity interest in Focus LLC and Focus will be accordingly dependent upon distributions from Focus LLC to pay taxes, make payments under the Tax Receivable Agreements and cover its corporate and other overhead expenses." If we experience a change of control (as defined under the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), Focus could be required to make a substantial, immediate lump-sum payment.

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Organizational Structure

        The following diagram indicates our ownership structure immediately following the reorganization transactions and this offering (assuming the underwriters do not exercise their option to purchase additional shares).

GRAPHIC


(1)
Does not include          shares of our Class A common stock reserved for future issuance upon exercise of vested non-compensatory stock options or unvested compensatory stock options.

(2)
Does not include                        shares of our Class A common stock reserved for issuance upon redemption of vested common units and vested incentive units in Focus LLC.

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(3)
Does not include             additional shares of Class A common stock reserved for future issuance under the Focus Financial Partners 2018 Omnibus Incentive Plan (the "Omnibus Plan"), which will become effective in connection with the completion of this offering.

(4)
Does not include             additional Focus LLC units reserved for future issuance under the Omnibus Plan, which will become effective in connection with the completion of this offering.


Risk Factors

        Investing in our Class A common stock involves risks and uncertainties. You should carefully read the section of this prospectus entitled "Risk Factors" for an explanation of these risks before investing in our Class A common stock. The principal risks we face include fluctuations in wealth management fees, our reliance on our partner firms and the principals who manage their businesses, our ability to make successful acquisitions, unknown liabilities of or poor performance by acquired businesses, harm to our reputation, our inability to facilitate smooth succession planning at our partner firms, our inability to compete, our reliance on key personnel, our inability to attract, develop and retain talented wealth management professionals, our inability to retain clients following an acquisition, write down of goodwill and other intangible assets, our failure to maintain and properly safeguard an adequate technology infrastructure, cyber-attacks, our inability to recover from business continuity problems, inadequate insurance coverage, the termination of management agreements by management companies, our inability to generate sufficient cash to service all of our indebtedness, the failure of our partner firms to comply with applicable U.S. and non-U.S. regulatory requirements, legal proceedings and governmental inquiries.


Emerging Growth Company Status

        We are an "emerging growth company" within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with certain requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these exemptions until we are no longer an emerging growth company.

        In addition, Section 107 of the Jumpstart Our Business Startups Act (the "JOBS Act") also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

        For a description of the qualifications and other requirements applicable to emerging growth companies, please read "Risk Factors—Risks Related to the Offering and our Class A Common Stock—For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies."


Our Offices

        We are a Delaware corporation. Our principal executive offices are located at 825 Third Avenue, 27th Floor, New York, NY 10022 and our telephone number at that address is (646) 519-2456. Our website address is www.                    . Information contained on our website does not constitute part of this prospectus.

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The Offering

Class A common stock outstanding before this offering

                shares.

Class A common stock offered by us

 

              shares (              shares if the underwriters' option to purchase additional shares is exercised in full).

Class A common stock to be outstanding immediately after completion of this offering

 

              shares (              shares if the underwriters' option to purchase additional shares is exercised in full).(1)

Option to purchase additional shares of Class A common stock

 

We have granted the underwriters a 30-day option to purchase up to an aggregate of              additional shares of our Class A common stock.

Class B common stock to be outstanding immediately after completion of this offering

 

              shares, or one share for each vested common unit held by the continuing owners immediately following this offering. Each share of Class B common stock has no economic rights but entitles its holder to one vote. When a vested common unit is acquired pursuant to the exercise of an exchange right or the call right, a corresponding share of Class B common stock will be cancelled.

Voting power of Class A common stock immediately after giving effect to this offering(1)

 

          %

Voting power of Class B common stock immediately after giving effect to this offering

 

          %


(1)
In this prospectus, the number of shares of our Class A common stock to be outstanding immediately after completion of this offering excludes:

             shares of our Class A common stock reserved for future issuance upon exercise of vested non-compensatory stock options or unvested compensatory stock options;

            shares of our Class A common stock issuable upon redemption of vested common units and vested incentive units in Focus LLC; and

            additional shares of Class A common stock reserved for future issuance under the Omnibus Plan, which will become effective in connection with the completion of this offering.

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Voting rights

  Each share of our Class A common stock entitles its holder to one vote. Each share of our Class B common stock entitles its holder to one vote. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law. Please read "Description of Capital Stock."

Use of proceeds

  We expect to receive approximately $              million of net proceeds from the sale of the Class A common stock offered by us, based upon the assumed initial public offering price of $        per share (the midpoint of the price range set forth on the cover of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us (or approximately $              million if the underwriters' option to purchase additional shares is exercised in full).

  We intend to use the net proceeds from this offering as follows:

 

we intend to use the net proceeds from this offering to pay $             million to mandatorily exchanging owners of vested incentive units and pay $             million to exchanging owners who elect to sell their Focus LLC units; and

 

we intend to contribute $             million of the net proceeds from this offering to Focus LLC (or $         million if the underwriters exercise their option to purchase additional shares in full) in exchange for        common units. Focus LLC will use $             million of such contribution amount to reduce indebtedness under our credit facilities. The remaining $             million of such contribution amount (or $             million if the underwriters exercise their option to purchase additional shares in full) will be used by Focus LLC for acquisitions and general corporate business purposes and to pay the expenses of this offering.

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  Each $1.00 increase (decrease) in the public offering price would increase (decrease) our net proceeds by approximately $          million (assuming no exercise of the underwriters' option to purchase additional shares). An increase (decrease) of 1,000,000 shares from the expected number of shares of Class A common stock to be sold by us in this offering, assuming no change in the assumed initial public offering price per share (the midpoint of the price range set forth on the cover of this prospectus), would increase (decrease) our net proceeds by approximately $          million. Any increase or decrease in proceeds due to a change in the initial public offering price or number of shares issued would increase or decrease, respectively, the amount of net proceeds contributed to Focus LLC to be used by it for acquisitions and general corporate business purposes.

Exchange rights of continuing owners

  Each unitholder of Focus LLC (other than Focus) will, subject to certain limitations, have the right to cause Focus LLC to redeem all or a portion of its vested common units and vested incentive units, which we refer to as an "exchange right." Upon an exercise of an exchange right with respect to vested incentive units, such incentive units will first be converted into a number of common units that takes into account the then-current value of the common units and such incentive units' aggregate hurdle amount. Upon an exercise of an exchange right with respect to vested common units, and immediately after the conversion of vested incentive units into common units as described in the preceding sentence, Focus LLC will acquire each tendered common unit for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions, or (ii) an equivalent amount of cash. In addition, in connection with any redemption of vested common units (other than common units received upon a conversion of incentive units as described in this paragraph), the corresponding shares of Class B common stock will be cancelled. Alternatively, upon the exercise of any exchange right, Focus (instead of Focus LLC) will have the right to acquire each tendered unit (and corresponding share of Class B common stock, as applicable) from the exchanging unitholder for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions, or (ii) an equivalent amount of cash, which we refer to as our "call right." The exchange rights will be subject to certain limitations and restrictions intended to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement."

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Tax Receivable Agreements

  In connection with the closing of this offering, we will enter into two Tax Receivable Agreements with the TRA holders which generally provide for the payment by Focus to the TRA holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that Focus actually realizes (computed using simplifying assumptions to address the impact of state and local income taxes) or is deemed to realize in certain circumstances in periods after this offering as a result of certain increases in tax basis and certain tax benefits attributable to imputed interest. We will retain the benefit of the remaining 15% of these cash savings. Please read "Certain Relationships and Related Party Transactions—Tax Receivable Agreements" for a description of the Tax Receivable Agreements generally and for a discussion of circumstances in which Focus will be deemed to realize net cash tax savings.

Dividend policy

  We do not anticipate paying any cash dividends on our Class A common stock. If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements and the amount of distributions to us from Focus LLC. Because we are a holding company, our cash flow and ability to pay dividends depends upon the financial results and cash flows of our operating subsidiaries and the distribution or other payment of cash to us in the form of dividends or otherwise from Focus LLC. Please read "Dividend Policy."

Directed share program

  The underwriters have reserved for sale at the initial public offering price up to      % of the Class A common stock being offered by this prospectus for sale to our employees, executive officers, directors, business associates and related persons who have expressed an interest in purchasing Class A common stock in the offering. We do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. Please read "Underwriting (Conflicts of Interest)."

Listing and trading symbol

  We have applied to list our Class A common stock on the NASDAQ Global Select Market under the symbol "FOCS".

Risk factors

  You should carefully read and consider the information beginning on page 29 of this prospectus set forth under the heading "Risk Factors" and all other information set forth in this prospectus before deciding to invest in our Class A common stock.

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Conflicts of interest

  Affiliates of KKR Capital Markets LLC own more than 10% of existing Focus LLC units. Because KKR Capital Markets LLC is an underwriter for this offering, it is deemed to have a "conflict of interest" within the meaning of FINRA Rule 5121(f)(5)(B). Accordingly, this offering is being made in compliance with the requirements of FINRA Rule 5121. Since KKR Capital Markets LLC is not primarily responsible for managing this offering, pursuant to FINRA Rule 5121, the appointment of a qualified independent underwriter is not necessary. KKR Capital Markets LLC will not confirm sales to discretionary accounts without the prior written approval of the customer. See "Underwriting (Conflicts of Interest)."

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Summary Historical and Pro Forma Consolidated Financial Data

        Focus Financial Partners Inc. was formed in July 2015 and does not have historical financial operating results. The following table shows summary historical and pro forma consolidated financial data of our accounting predecessor, Focus Financial Partners, LLC, for the periods and as of the dates presented. Focus Financial Partners, LLC was formed on November 30, 2004.

        The summary historical consolidated financial data as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 were derived from the audited historical consolidated financial statements of our accounting predecessor included elsewhere in this prospectus. The summary historical consolidated financial data as of December 31, 2015 were derived from the audited historical consolidated financial statements of our accounting predecessor not included in this prospectus. The summary unaudited historical consolidated financial data for the three months ended March 31, 2017 and as of and for the three months ended March 31, 2018 were derived from the unaudited condensed consolidated financial statements of our accounting predecessor included elsewhere in this prospectus. The summary unaudited historical balance sheet data as of March 31, 2017 were derived from unaudited condensed consolidated financial statements of our accounting predecessor not included in this prospectus. The summary unaudited historical consolidated financial data has been prepared on a consistent basis with the audited consolidated financial statements of Focus Financial Partners, LLC. In the opinion of management, such summary unaudited historical consolidated financial data reflects all adjustments, consisting of normal recurring adjustments, considered necessary to present our financial position for the periods presented. The results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the full year. Our historical results are not necessarily indicative of statements of financial position or results of operations as of any future date or for any future period.

        The summary unaudited pro forma consolidated statement of operations data for the year ended December 31, 2017 has been prepared to give pro forma effect to (i) the reorganization transactions described under "Internal Reorganization", (ii) this offering and the application of the net proceeds from this offering and (iii) the acquisition of the business of SCS Financial Services, LLC and subsidiaries on July 3, 2017 (the "SCS Acquisition") as if they had each been completed as of January 1, 2017. The summary unaudited pro forma consolidated statement of operations data for the three months ended March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of January 1, 2017, with the exception of the SCS Acquisition, which is included in the unaudited consolidated statement of operations data of our accounting predecessor for the three months ended March 31, 2018. The summary unaudited pro forma consolidated balance sheet data as of March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of March 31, 2018, with the exception of the SCS Acquisition, which is included in the unaudited balance sheet of our accounting predecessor as of March 31, 2018. The summary unaudited pro forma consolidated financial data are presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the reorganization transactions, this offering and the SCS Acquisition been consummated on the dates indicated and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period.

        You should read the following table in conjunction with "Internal Reorganization," "Use of Proceeds," "Selected Historical and Pro Forma Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," the historical consolidated financial statements of our accounting predecessor included elsewhere in this prospectus and the pro forma consolidated financial statements of Focus Financial Partners Inc. set forth under "Unaudited Pro Forma Consolidated Financial Information." Among other things, the historical and pro forma

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financial statements include more detailed information regarding the basis of presentation for the following information.

 
   
   
   
  Three Months Ended March 31,    
   
 
 
   
   
   
  Focus Financial Partners Inc.
Pro Forma
 
 
  Focus Financial Partners, LLC  
 
  Year Ended December 31,    
   
   
  Three Months
Ended
March 31,
2018
 
 
   
   
  Year Ended
December 31,
2017
 
 
  2015   2016   2017   2017   2018  
 
  (dollars in thousands, except per share data)
 

Consolidated Statements of Operations Data:

                                           

Revenues

  $ 382,347   $ 485,444   $ 662,887   $ 135,546   $ 196,229   $              $             

Operating expenses

    361,030     447,161     657,134     124,152     183,683                                

Income from operations

    21,317     38,283     5,753     11,394     12,546                                

Other expense, net

    (11,347 )   (21,580 )   (55,613 )   (6,501 )   (23,424 )                              

Income (loss) before income tax

    9,970     16,703     (49,860 )   4,893     (10,878 )                              

Income tax expense (benefit)

    649     981     (1,501 )   442     1,176                                

Net income (loss)

  $ 9,321   $ 15,722   $ (48,359 ) $ 4,451   $ (12,054 ) $              $             

Net income (loss) per share of Class A common stock:

                                           

Basic

  $              $             

Diluted

  $              $             

Consolidated Balance Sheets Data (at period end):

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Cash and cash equivalents

  $ 15,499   $ 16,508   $ 51,455   $ 17,815   $ 27,949   $              $             

Total assets

    550,670     752,941     1,234,837     814,765     1,254,519                                

Total liabilities

    418,871     562,339     1,148,749     605,862     1,170,399                                

Total mezzanine equity

    405,347     452,485     864,749     468,416     864,749                                

Total members' deficit/shareholders' equity

    (273,548 )   (261,883 )   (778,661 )   (259,513 )   (780,629 )                              

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Net income (loss) margin(1)

    2.4 %   3.2 %   (7.3 )%   3.3 %   (6.1 )%            

Adjusted EBITDA(2)

  $ 75,442   $ 103,038   $ 145,226   $ 28,198   $ 44,221   $              $             

Adjusted EBITDA margin(3)

    19.7 %   21.2 %   21.9 %   20.8 %   22.5 %            

Adjusted Net Income(4)

  $ 60,538   $ 77,504   $ 96,553   $ 20,627   $ 28,302   $              $             

(1)
Net income (loss) margin is defined as net income divided by revenues.

(2)
Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business."

(3)
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenues.

(4)
Adjusted Net Income is a non-GAAP financial measure. For a definition of Adjusted Net Income and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business."

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RISK FACTORS

        Investing in our Class A common stock involves risks. You should carefully consider the information in this prospectus, including the matters addressed under "Special Note Regarding Forward-Looking Statements," and the following risks before making an investment decision. The trading price of our Class A common stock could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to Capital Markets and Competition

Our financial results largely depend on wealth management fees received by our partner firms, which are impacted by market fluctuations.

        The substantial majority of our revenues are derived from the wealth management fees charged by our partner firms for providing clients with investment advice, financial and tax planning, consulting, tax return preparation, family office services and other services. Wealth management fees may be adversely affected by prolonged declines in the capital markets because assets of clients may decline. Global economic conditions, exacerbated by changes in the equity or debt marketplaces, unanticipated changes in currency exchange rates, interest rates, inflation rates, the yield curve, financial crises, war, terrorism, natural disasters or other factors that are difficult to predict affect the capital markets. If unfavorable market conditions, actions taken by clients in response to market conditions (such as clients reducing or eliminating the amount of their assets with respect to which our partner firms provide advice) or volatility in the capital markets cause a decline in client assets overseen by our partner firms, such a decline could result in lower revenues from wealth management fees. If our partner firms' revenues decline without a commensurate reduction in their expenses, their net income will be reduced and their business will be negatively affected, which may have an adverse effect on our results of operations and financial condition.

The historical returns of existing investment strategies of our partner firms may not be indicative of their future results or of the future results of investment strategies they may develop in the future.

        The historical returns of our partner firms' existing investment strategies should not be considered indicative of the future results of these strategies or of the results of any other strategies that our partner firms may develop in the future. The investment performance that our partner firms achieve for their clients varies over time, and the variance can be wide. The performance that our partner firms achieve as of a future date and for a future period may be higher or lower, and the difference may be material. During times of negative economic and market conditions, our partner firms may not be able to identify investment opportunities within their current or future strategies.

Our partner firms may not be able to maintain their current wealth management fee structure as a result of poor investment performance or competitive pressures or as a result of changes in their mix of wealth management services, which could have an adverse effect on our partner firms' results of operations.

        Our partner firms may not be able to maintain their current wealth management fee structure for any number of reasons, including as a result of poor investment performance, competitive pressures or changes in their mix of wealth management services. In order to maintain their fee structure in a competitive environment, our partner firms must be able to continue to provide clients with investment services that their clients believe justify their fees. Our partner firms may not succeed in providing the investment services that will allow them to maintain their current fee structure. If our partner firms' investment strategies perform poorly, they may be forced to lower their fees in order to retain current, and attract additional, clients. Such decline in a partner firm's revenue could have an adverse effect on our results of operations and financial condition.

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The wealth management industry is very competitive.

        We compete for clients, advisors and other personnel with a broad range of wealth management firms, including public and privately held investment advisors, firms associated with securities broker-dealers, financial institutions and insurance companies, many of whom have greater resources than we do. The wealth management industry is very competitive, with competition based on a variety of factors, including investment performance, wealth management fee rates, the quality of services provided to clients, the ability to attract and retain key wealth management professionals, the depth and continuity of client relationships, adherence to the fiduciary standard and reputation. A number of factors, including the following, serve to increase the competitive risks of our partner firms: (i) many competitors have greater financial, technical, marketing, name recognition and other resources and more personnel than our partner firms do, (ii) potential competitors have a relatively low cost of entering the wealth management industry, (iii) some competitors may invest according to different investment styles or in alternative asset classes that the markets may perceive as more attractive than the investment strategies our partner firms offer, (iv) some competitors charge lower fees for their wealth management services than our partner firms do and (v) some competitors may be able to engage in more widespread marketing activities or may have access to products and services to which our partner firms do not.

        If we are unable to compete effectively, our results of operations and financial condition may be adversely affected.

Risks Related to Our Operations

Because clients can terminate their client service contracts at any time, poor wealth management service or performance of the investment strategies that our partner firms recommend may have an adverse effect on our results of operations and financial condition.

        Our clients can generally terminate their client service contracts with us at any time. We cannot be certain that we will be able to retain our existing clients or attract new clients, and these client service contracts and client relationships may be terminated or not renewed for any number of reasons. In particular, poor wealth management service or performance of the investment strategies that our partner firms recommend relative to the performance of other wealth management firms could result in the loss of accounts. Moreover, certain clients specify guidelines regarding investment allocation and strategy that our partner firms are required to follow in managing their portfolios, and the failure to comply with any of these guidelines and other limitations could result in losses to clients, which could result in the obligation to make clients whole for such losses. If we believe that the circumstances do not justify a reimbursement, or our client believes that the reimbursement it was offered was insufficient, the client could seek to recover damages from us in addition to terminating its client service contract. Any of these events could adversely affect our results of operations and financial condition and harm our reputation.

Our results of operations could be adversely affected if we are unable to facilitate smooth succession planning.

        We cannot predict with certainty how long the principals or employees of our partner firms will continue working, and upon the retirement or exit of a principal or employee, a partner firm's business may be adversely affected. If we are not successful in facilitating succession planning of our partner firms, our results of operations and financial condition could be adversely affected.

If our reputation is harmed, we could suffer losses in our business and financial results.

        Our business depends on earning and maintaining the trust and confidence of our partner firms. Our reputation is critical to our business and is vulnerable to threats that may be difficult or impossible to control and costly or impossible to remediate. For example, failure to comply with applicable laws, rules or regulations, errors in our public reports or litigation or the publicity surrounding these events,

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even if satisfactorily addressed, could adversely impact our reputation, our relationships with our partner firms and our ability to negotiate acquisitions and partner firm-level acquisitions with wealth management firms, as well as adversely affect our results of operations and financial condition.

Our reliance on our partner firms to report their results to us may make it difficult to respond quickly to negative business developments, which could adversely affect our results of operations and financial condition.

        We rely on our partner firms to report their results to us on a monthly basis. We have implemented common general ledger, payroll and cash management systems that allow us to monitor the financial performance and overall operations of our partner firms. However, if our partner firms delay reporting results or informing us of negative business developments, we may not be able to address the situation on a timely basis, which could have an adverse effect on our results of operations and financial condition.

Our controls and procedures may fail or be circumvented, our risk management policies and procedures may be inadequate and operational risks could adversely affect our reputation and financial condition.

        We and our partner firms have adopted various controls, procedures, policies and systems to monitor and manage risk in our business. Some of our risk evaluation methods depend upon information provided by our partner firms and others and public information regarding markets, clients or other matters. In some cases, however, that information may not be accurate, complete or up-to-date. While we currently believe that our operational controls are effective, we cannot provide assurance that those controls, procedures, policies and systems will always be adequate to identify and manage the internal and external risks in our business in a timely manner. Furthermore, we may have errors in our business processes or fail to implement proper procedures in operating our business, which may expose us to risk of financial loss. We are also subject to the risk that our employees or contractors, the employees or contractors of our partner firms or other third parties may deliberately seek to circumvent established controls to commit fraud or act in ways that are inconsistent with our and our partner firms' controls, policies and procedures. The financial and reputational impact of control failures could be significant.

        In addition, our businesses and the markets in which we operate are continuously evolving. If our risk framework is ineffective, either because it fails to keep pace with changes in the financial markets, regulatory requirements or our business, counterparties, clients or service providers or for other reasons, we could incur losses, suffer reputational damage or fall out of compliance with applicable regulatory or contractual mandates or expectations. Any of these events could adversely affect our reputation and financial condition.

Failure to maintain and properly safeguard an adequate technology infrastructure and to protect against cyber-attacks may limit our growth, result in losses or disrupt our business.

        Our business is reliant upon financial, accounting and technology systems and networks to process, transmit and store information, including sensitive client and proprietary information, and to conduct many business activities and transactions with clients, advisors, vendors and other third parties. The failure to implement, maintain and safeguard an infrastructure commensurate with the size and scope of our business could impede our productivity and growth, which could adversely impact our results of operations and financial condition. Further, we rely heavily on third parties for certain aspects of our business, including financial intermediaries and technology infrastructure and service providers, and these parties are also susceptible to similar risks.

        Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software, networks and mobile devices, and those of third parties on whom we rely, may be vulnerable to cyber-attacks, breaches, unauthorized access, theft, misuse, computer viruses or other malicious code and other events that could have a security impact. Further, our back-up

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procedures, cyber defenses and capabilities in the event of a failure, interruption or breach of security may not be adequate. If any such events occur, it could jeopardize our, as well as our clients', employees' or counterparties' confidential, proprietary and other sensitive information processed and stored in, and transmitted through, our or third-party computer systems, networks and mobile devices or otherwise cause interruptions or malfunctions in our, as well as our clients', employees' or counterparties' operations. Despite our efforts to ensure the integrity of our systems and networks, it is possible that we may not be able to anticipate or to implement effective preventive measures against all threats, especially because the techniques used change frequently and can originate from a wide variety of sources. As a result, we could experience business disruptions, significant losses, increased costs, reputational harm, regulatory actions or legal liability, any of which could have an adverse effect on our results of operations and financial condition. We may in the future be required to spend significant additional resources to modify existing protective measures or to investigate and remediate vulnerabilities or other exposures, including hiring third-party technology service providers and additional information technology staff. Additionally, we may be subject to litigation and financial losses that are either not insured against fully or not fully covered through any insurance that we maintain.

Our inability to successfully recover from a disaster or other business continuity problem could cause material financial loss, regulatory actions, reputational harm or legal liability.

        Should we experience a local or regional disaster or other business continuity problem, such as a terrorist attack, pandemic, security breach, power loss, telecommunications failure, earthquake, hurricane or other natural or man-made disaster, our continued success will depend, in part, on the availability of personnel and office facilities, and the proper functioning of computer, telecommunication and other related systems and operations. Further, we could potentially lose client data or experience adverse interruptions to our operations or delivery of services to clients in a disaster recovery scenario, which could result in material financial loss, regulatory action, reputational harm or legal liability.

Our insurance coverage may be inadequate or expensive.

        We maintain voluntary and required insurance coverage, including, among others, general liability, property, director and officer, errors and omissions, network security and privacy, fidelity bond and fiduciary liability insurance and insurance required under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Such entity insurance costs were approximately $4.8 million and $1.3 million for the year ended December 31, 2017 and the three months ended March 31, 2018, respectively. Recently in the insurance industry, premiums and deductible costs associated with certain insurance coverage have increased, and the number of insurers has decreased. While we endeavor to purchase coverage that is appropriate to our assessment of our risk, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages. Our business may be negatively affected if in the future our insurance proves to be inadequate or unavailable. In addition, insurance claims may harm our reputation or divert management resources away from operating our business.

If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A common stock.

        Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with

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our obligations under Section 404 of the Sarbanes-Oxley Act. For example, Section 404 will require us, among other things, to annually review and report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal controls over financial reporting. We must comply with Section 404 (except for the requirement for an auditor's attestation report) beginning with our second annual report on Form 10-K after becoming a public company. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could adversely affect our results of operations and financial condition or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our Class A common stock.

Risks Related to Our Partnership Model and Growth Strategy

Our success depends, in part, on our ability to make successful acquisitions.

        Our continued success will depend, in part, upon our ability to find suitable partner firms to acquire, our ability to acquire such firms on acceptable terms and our ability to raise the capital necessary to finance such transactions. We compete with banks, outsourced service providers, private equity firms and other wealth management and advisory firms to acquire high-quality wealth management firms. Some of our competitors may be able to outbid us for these acquisition targets. If we identify suitable acquisition targets, we may not be able to complete any such acquisition on terms that are commercially acceptable to us. If we are not successful in acquiring suitable acquisition candidates, it may have an adverse effect on our business and on our earnings and revenue growth.

Acquired businesses may not perform as expected, leading to an adverse effect on our earnings and revenue growth.

        Acquisitions involve a number of risks, including the following, any of which could have an adverse effect on our partner firms' and our earnings and revenue growth: (i) incurring costs in excess of what we anticipated; (ii) potential loss of key wealth management professionals or other team members of the predecessor firm; (iii) inability to generate sufficient revenue to offset transaction costs; (iv) inability to retain clients following an acquisition; (v) incurring expenses associated with the amortization or impairment of intangible assets, particularly for goodwill and other intangible assets; and (vi) payment of more than fair market value for the assets of the partner firm.

        While we intend that our completed acquisitions will improve profitability, past or future acquisitions may not be accretive to earnings or otherwise meet operational or strategic expectations. The failure of any partner firm to perform as expected after acquisition may have an adverse effect on our earnings and revenue growth.

Contingent consideration payments could result in a higher than expected impact on our future earnings.

        We have typically incorporated into our acquisition structure contingent consideration paid to the sellers upon the achievement of specified financial thresholds. The contingent consideration is paid upon the satisfaction of specified growth thresholds typically over a six-year period. This arrangement may result in the payment of additional purchase price consideration to the sellers for periods following the closing of an acquisition. We anticipate that future acquisitions will continue to include contingent consideration. For business acquisitions, we recognize the fair value of estimated contingent consideration at the acquisition date and contingent consideration is remeasured to fair value at each reporting period until the contingency is resolved. Since the contingent consideration to be paid is based on the growth of forecasted financial performance levels over a number of years, we cannot calculate the maximum contingent consideration that may be payable under these arrangements. Contingent consideration payments could result in a higher than expected impact on our future earnings.

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We may incur debt, issue additional equity or use cash on hand to pay for future acquisitions, each of which could adversely affect our financial condition or the market price of our Class A common stock.

        We may finance future acquisitions through debt financing, including significant draws on our first lien revolving credit facility, issuance of additional term debt, the issuance of equity securities, the use of existing cash or cash equivalents or any combination of the foregoing. Acquisitions financed with debt could require us to dedicate a substantial portion of our cash flow to principal and interest payments. Acquisitions financed with the issuance of our equity securities would be dilutive to the share value and voting power of our existing Class A common stock, which could affect the market price of our Class A common stock. Future acquisitions financed with our own cash could deplete the cash and working capital available to fund our operations adequately. Difficulty borrowing funds, selling securities or generating sufficient cash from operations to finance our activities may have a material adverse effect on our results of operations and financial condition.

Our growth strategy depends, in part, upon continued growth from our existing partner firms. However, the significant growth we have experienced may be difficult to sustain in the future.

        Over the last three years, our total revenues, our net income, our Adjusted EBITDA and our Adjusted Net Income CAGRs were 26.7%, (259.2)%, 28.9% and 20.0%, respectively. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business" for a reconciliation of Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP financial measure. The continued growth of our business will depend on, among other things, the ability of our partner firms to grow through acquisitions, to retain key wealth management professionals and to devote sufficient resources to maintaining existing client relationships and developing new client relationships. Our business growth will also depend on their success in providing high-quality wealth management services, as well as their ability to deal with changing market conditions, to maintain adequate financial and business controls and to comply with new regulatory requirements arising in response to both the increased sophistication of the wealth management industry and the significant market and economic events of the last few years. In the future, our partner firms may not contribute to our growth at their historical or currently anticipated levels.

Our acquisition due diligence process may not reveal all facts that are relevant in connection with an acquisition, which could subject us to unknown liabilities.

        In connection with our acquisitions of new partner firms and acquisitions by existing partner firms, we conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to such transactions and expect to use our resources to enhance the risk management functions and diligence of our business and our partner firms' businesses going forward. When conducting due diligence, we evaluate important and complex business, financial, tax, accounting, legal and compliance issues. Outside consultants, legal advisers, accountants, regulatory experts and other third parties may be involved in the due diligence process in varying degrees depending on the type, size and complexity of the acquisition. When conducting due diligence and making an assessment regarding a transaction, we have and will continue to rely on the resources available to us, including information provided by third parties. Our diligence efforts with respect to RIAs that were newly formed in connection with our Focus Independence program may be limited due to the short operating history of such firms.

        Since commencing acquisition activities in 2006, there were certain instances where we discovered matters about acquired partner firms that were not uncovered during the due diligence process. These instances did not have a material impact on our financial position, results of operations or cash flows, and our acquisition agreements include standard sellers' representations and warranties and indemnification provisions that provide us with some financial protection in the event of an

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undiscovered or undisclosed matter. However, the due diligence investigations that we have carried out or will carry out with respect to any transaction may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating the transaction, which could subject us or our partner firms to unknown liabilities that could adversely affect our or our partner firms' results of operations and financial condition.

The success of Focus Independence depends upon our ability to lift out teams of wealth management professionals from traditional brokerages and wirehouses.

        Our ability to lift out teams of wealth management professionals from traditional brokerages and wirehouses depends on our ability to offer more favorable opportunities than those provided by their current employers, many of which have substantially greater financial resources and may be able to entice their current employees to stay. If we are not successful in attracting and lifting out suitable wealth management professionals for our Focus Independence program, it may have an adverse effect on the growth of our revenues and earnings.

We may encounter complications in implementing Focus Successions related to transitioning and administering client assets and obtaining required client consents.

        We have succession agreements with prospective advisors as part of Focus Successions. No succession transition has been initiated to date, but several of the succession plans have been converted into acquisitions by our partner firms. In the future, we may encounter complications as we implement these succession agreements, including problems transitioning and administering client assets at the custodians and difficulties in obtaining any required client consent. Furthermore, because we are unable to predict when any particular agreement might take effect or what acquired assets would be transferred at such time, we are unable to quantify the potential cost of completing succession transactions in the future. Difficulties implementing Focus Successions could have an adverse effect on the growth of our partner firms.

We may face operational risks associated with expanding internationally.

        Our business strategy includes expanding our presence in non-U.S. markets through acquisitions. This strategy presents a number of risks, including: (i) greater difficulties in supporting, or the need to hire additional personnel to support, the operations of foreign partner firms, (ii) language and cultural differences, (iii) unfavorable fluctuations in foreign currency exchange rates, (iv) higher operating costs, (v) unexpected changes in wealth management policies and other regulatory requirements, (vi) adverse tax consequences and (vii) more complex acquisition structures. If our international business increases relative to our total business, these factors could have a more pronounced effect on our results of operations and financial condition.

Risks Related to Our Business Model and Key Professionals

Our partner firms' autonomy limits our ability to alter their management practices and policies, and our dependence on the principals who manage the businesses of our partner firms may have an adverse effect on our business.

        Under the management agreements between our partner firms and the new management companies formed by the principals, the management companies provide the personnel who manage the partner firm's day-to-day operations and oversee the provision of wealth management services, the implementation of employment policies, the negotiation, execution and delivery of contracts in connection with the management and operation of the partner firm's business in the ordinary course and the implementation of policies and procedures to ensure compliance with all applicable laws, rules and regulations. Such individuals also maintain the primary relationships with clients and vendors. As a consequence, we are exposed to losses resulting from day-to-day decisions of the principals who

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manage our partner firm, and our financial condition and results of operations may be adversely affected by problems stemming from the day-to-day operations of a partner firm, where weaknesses or failures in internal processes or systems could lead to a disruption of the partner firm's operations, liability to its clients or exposure to disciplinary action. Unsatisfactory performance by the principals could also hinder the partner firms' ability to grow and could have an adverse effect on our business. Further, there is a risk of reputational harm to us if any of our partner firms, among other things, have engaged in, or in the future were to engage in, poor business practices or were to experience adverse results.

We rely on our key personnel and principals.

        We depend on the efforts of our executive officers, other management team members, employees and principals. Our executive officers, in particular, play an important role in the stability and growth of our business, including the growth and stability of existing partner firms and in identifying potential acquisition opportunities for us. However, there is no guarantee that these officers will remain with us. In addition, our partner firms depend heavily on the services of key principals, who in many cases have managed their predecessor firms for many years. Although we use a combination of economic incentives, transfer restrictions and non-solicitation and non-competition agreements in an effort to retain key management personnel, there is no guarantee that these principals will remain with the respective partner firms. The loss of key management personnel at our partner firms could have an adverse impact on our business.

        In addition, compliance with public company requirements will place significant additional demands on our senior management and will require us to enhance our investor relations, legal, financial reporting, corporate communications and certain other functions. These additional efforts may strain our resources and divert management's attention from other business concerns, which could adversely affect our business.

If a management company terminates its management agreement with us, our financial condition and results could be negatively affected.

        At the time of the acquisition of a partner firm, we enter into a management agreement with the management company that is substantially owned by the selling principals. Pursuant to the management agreement, the management company provides the personnel who conduct the day-to-day management and operation of the partner firm. These management agreements can be terminated by the management company at the end of the initial term, which is typically six years. Termination of a management agreement could lead to a disruption of the partner firm's operations, which could negatively affect our financial condition and results of operations.

If our partner firms are unable to maintain their client-oriented, fiduciary-minded culture or compensation levels for wealth management professionals, they may be unable to attract, develop and retain talented wealth management professionals, which could negatively impact their financial results and their ability to grow.

        Attracting, developing and retaining talented wealth management professionals are essential components of the business strategy of our partner firms. To do so, it is critical that they continue to foster an environment and provide compensation that is attractive for their existing and prospective wealth management professionals. If they are unsuccessful in maintaining such an environment (for instance, because of changes in management structure, corporate culture or corporate governance arrangements) or compensation levels for any reason, their existing wealth management professionals may leave the firm or fail to produce their best work on a consistent, long-term basis and/or our partner firms may be unsuccessful in attracting talented new wealth management professionals, any of which could negatively impact their financial results and their ability to grow and may have an adverse effect on our results of operations and financial condition.

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Risks Related to Our Internal Reorganization and Resulting Structure

Our internal reorganization may adversely affect our relationship with certain principals and employees.

        Our performance is largely dependent on the efforts and motivation of our principals and employees. One element of our partnership is an alignment of interests of principals and employees with our goals through their ownership of common units and incentive units in Focus LLC. In connection with the reorganization transactions, Focus LLC will purchase all common and incentive units held by existing owners who are not accredited investors. Many of these existing owners, who will cease to be members of Focus LLC, are principals or employees. Current and future principals and employees may receive grants of restricted Class A common stock or stock options under the Omnibus Plan. The incentives to attract, retain and motivate principals and employees provided by their ownership of Class A common stock and stock options or by future arrangements may not be as effective as the status as, or opportunity to become, a member in Focus LLC.

Focus is a holding company. Focus's sole material asset after completion of this offering will be its equity interest in Focus LLC, and Focus will be accordingly dependent upon distributions from Focus LLC to pay taxes, make payments under the Tax Receivable Agreements and cover its corporate and other overhead expenses.

        Focus is a holding company and will have no material assets other than its equity interest in Focus LLC. Please read "Internal Reorganization—Structure Upon Completion of Offering." Focus has no independent means of generating revenue. To the extent Focus LLC has available cash and subject to the terms of Focus LLC's credit agreements and any other debt instruments, we intend to cause Focus LLC to make (i) generally pro rata distributions to its unitholders, including Focus, in an amount generally intended to allow the Focus LLC unitholders to satisfy their respective income tax liabilities with respect to their allocable share of the income of Focus LLC, based on certain assumptions and conventions, provided that the distribution will be sufficient to allow Focus to satisfy its actual tax liabilities and to make payments under the Tax Receivable Agreements that it will enter into with the TRA holders in connection with the closing of this offering and any subsequent tax receivable agreements that it may enter into in connection with future acquisitions and (ii) non pro rata distributions to Focus in an amount at least sufficient to reimburse Focus for its corporate and other overhead expenses. Focus LLC may make tax distributions to its existing owners or tax payments on their behalf before or shortly after the consummation of this offering with respect to the taxable income of Focus LLC for the period ending on the date of such consummation. We are limited, however, in our ability to cause Focus LLC and its subsidiaries to make these and other distributions to Focus due to the restrictions under Focus LLC's credit facilities. To the extent that Focus needs funds and Focus LLC or its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of their financing arrangements or are otherwise unable to provide such funds, Focus's liquidity and financial condition could be adversely affected.

Focus will be required to make payments under the Tax Receivable Agreements for certain tax benefits it may claim, and the amounts of such payments could be significant.

        In connection with the closing of this offering, Focus will enter into two Tax Receivable Agreements with the TRA holders. The agreements generally provide for the payment by Focus to each TRA holder of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that Focus actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after this offering as a result of certain increases in tax basis and certain tax benefits attributable to imputed interest. We will retain the benefit of the remaining 15% of these cash savings.

        The term of each Tax Receivable Agreement will commence upon the completion of this offering and will continue until all tax benefits that are subject to such Tax Receivable Agreement have been

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utilized or expired, unless we experience a change of control (as defined under the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), and Focus makes the termination payments specified in the Tax Receivable Agreements. In addition, payments made under the Tax Receivable Agreements will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return.

        The payment obligations under the Tax Receivable Agreements are Focus's obligations and not obligations of Focus LLC, and we expect that such payments required to be made under the Tax Receivable Agreements will be substantial. Estimating the amount and timing of payments that may become due under the Tax Receivable Agreements is by its nature imprecise. For purposes of the Tax Receivable Agreements, cash savings in tax generally are calculated by comparing Focus's actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income and franchise tax rate) to the amount Focus would have been required to pay had it not been able to utilize any of the tax benefits subject to the Tax Receivable Agreements. The actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreements, will vary depending upon a number of factors, including the timing of any redemption of units, the price of our Class A common stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount and timing of the taxable income we generate in the future, the U.S. federal income tax rates then applicable, and the portion of the payments under the Tax Receivable Agreements that constitute imputed interest or give rise to depreciable or amortizable tax basis.

        The payments under the Tax Receivable Agreements will not be conditioned upon a TRA holder having a continued ownership interest in Focus or Focus LLC. Please read "Certain Relationships and Related Party Transactions—Tax Receivable Agreements."

In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits, if any, realized in respect of the tax attributes subject to the Tax Receivable Agreements.

        If we experience a change of control (as defined under the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), Focus could be required to make a substantial, immediate lump-sum payment. This payment would equal the present value of hypothetical future payments that could be required to be paid under the Tax Receivable Agreements (determined by applying a discount rate of one-year London Interbank Offered Rate ("LIBOR") plus        %). The calculation of hypothetical future payments will be based upon certain assumptions and deemed events set forth in the Tax Receivable Agreements, including (i) that Focus has sufficient taxable income to fully utilize the tax benefits covered by the Tax Receivable Agreements and (ii) any Focus LLC units (other than those held by Focus) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payments may be made significantly in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the termination payments relate.

        If we experience a change of control (as defined under the Tax Receivable Agreements) or the Tax Receivable Agreements otherwise terminate early, Focus's obligations under the Tax Receivable Agreements could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales or other forms of business combinations or changes of control. For example, if the Tax Receivable Agreements were terminated immediately after this offering, the estimated termination payments would, in the aggregate, be approximately $             million (calculated using a discount rate equal to one-year LIBOR plus        %, applied against an undiscounted liability of $             million); this amount could be substantially larger if Focus enters

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into additional tax receivable agreements in connection with future acquisitions by Focus LLC. The foregoing amounts are merely estimates and the actual payments could differ materially. There can be no assurance that we will be able to finance any payments required to be made under the Tax Receivable Agreements.

        Please read "Certain Relationships and Related Party Transactions—Tax Receivable Agreements."

In the event that payment obligations under the Tax Receivable Agreements are accelerated upon certain mergers, other forms of business combinations or other changes of control, the consideration payable to holders of our Class A common stock could be substantially reduced.

        If we experience a change of control (as defined under the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations), Focus would be obligated to make a substantial, immediate lump-sum payment, and such payment may be significantly in advance of, and may materially exceed, the actual realization, if any, of the future tax benefits to which the payment relates. As a result of this payment obligation, holders of our Class A common stock could receive substantially less consideration in connection with a change of control transaction than they would receive in the absence of such obligation. Further, any payment obligations under the Tax Receivable Agreements will not be conditioned upon the TRA holders' having a continued interest in Focus or Focus LLC. Accordingly, the TRA holders' interests may conflict with those of the holders of our Class A common stock. Please read "Risk Factors—Risks Related to Our Internal Reorganization and Resulting Structure—In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits realized, if any, in respect of the tax attributes subject to the Tax Receivable Agreements" and "Certain Relationships and Related Party Transactions—Tax Receivable Agreements."

We will not be reimbursed for any payments made under the Tax Receivable Agreements in the event that any tax benefits are subsequently disallowed.

        Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we will determine. The TRA holders will not reimburse us for any payments previously made under the Tax Receivable Agreements if any tax benefits that have given rise to payments under the Tax Receivable Agreements are subsequently disallowed, except that excess payments made to any TRA holder will be netted against payments that would otherwise be made to such TRA holder, if any, after our determination of such excess. As a result, in such circumstances, we could make payments that are greater than our actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect our liquidity.

If Focus LLC were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, significant tax inefficiencies might result, and Focus would not be able to recover payments previously made by it under the Tax Receivable Agreements even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.

        A number of aspects of our structure depend on the classification of Focus LLC as a partnership for U.S. federal income tax purposes. Subject to certain exceptions relating to the receipt of predominantly qualifying income for which we do not expect to qualify, a "publicly traded partnership" is taxable as a corporation for U.S. federal income tax purposes. The U.S. Treasury regulations provide that a "publicly traded partnership" is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, exchanges of Focus LLC units pursuant to an exchange right (or the call right) or other transfers of Focus LLC units could cause Focus LLC to be treated as a publicly traded partnership. The U.S. Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and we intend to operate such that exchanges or other transfers of Focus LLC units qualify for one or more such safe harbors. For example, we intend to limit the number of unitholders

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of Focus LLC, and the Fourth Amended and Restated Focus LLC Agreement, which will be entered into in connection with the closing of this offering, will provide for limitations on the ability of unitholders of Focus LLC to transfer their Focus LLC units and will provide us, as managing member of Focus LLC, with the right to impose limitations and restrictions (in addition to those already in place), subject to certain consent rights, on the ability of unitholders of Focus LLC to exchange their Focus LLC units pursuant to an exchange right to the extent we believe it is necessary to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes.

        If Focus LLC were to become a publicly traded partnership, significant tax inefficiencies might result, including as a result of Focus's inability to file a consolidated U.S. federal income tax return with Focus LLC. In addition, Focus would no longer have the benefit of the increases in tax basis covered under the Tax Receivable Agreements, and Focus would not be able to recover any payments previously made under the Tax Receivable Agreements, even if the corresponding tax benefits (including any claimed increase in the tax basis of Focus LLC's assets) were subsequently determined to have been unavailable.

In certain circumstances, Focus LLC will be required to make tax distributions to the Focus LLC unitholders, including Focus, and the tax distributions that Focus LLC will be required to make may be substantial. To the extent Focus receives tax distributions in excess of its tax liabilities and obligations to make payments under the Tax Receivable Agreements and retains such excess cash, the continuing owners would benefit from such accumulated cash balances if they exercise their exchange right.

        Pursuant to the Fourth Amended and Restated Focus LLC Agreements, Focus LLC will make generally pro rata cash distributions, or tax distributions, to the Focus LLC unitholders, including Focus, in an amount generally intended to allow the Focus LLC unitholders to satisfy their respective income tax liabilities with respect to their allocable share of the income of Focus LLC, based on certain assumptions and conventions, provided that the distribution will be sufficient to allow Focus to satisfy its actual tax liabilities and to make payments under the Tax Receivable Agreements that it will enter into with the TRA holders in connection with the closing of this offering and any subsequent tax receivable agreements that it may enter into in connection with future acquisitions. Focus LLC may make tax distributions to its existing owners or tax payments on their behalf before or shortly after the consummation of this offering with respect to the taxable income of Focus LLC for the period ending on the date of such consummation. Under applicable tax rules, Focus LLC is required to allocate net taxable income disproportionately to its members in certain circumstances. Because tax distributions will be made pro rata based on ownership and based on an assumed tax rate, Focus LLC will be required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes that Focus LLC would have paid if it were taxed on its net income at the assumed rate. The pro rata distribution amounts will also be increased to the extent necessary, if any, to ensure that the amount distributed to Focus is sufficient to enable Focus to pay its actual tax liabilities and any amounts payable under the Tax Receivable Agreements.

        Funds used by Focus LLC to satisfy its tax distribution obligations will not be available for reinvestment in our business. Moreover, the tax distributions Focus LLC will be required to make may be substantial, and may exceed (as a percentage of Focus LLC's income) the overall effective tax rate applicable to a similarly situated corporate taxpayer. In addition, because these payments will be calculated with reference to an assumed tax rate, and because of the disproportionate allocation of net taxable income, these payments may significantly exceed the actual tax liability for many of the existing owners of Focus LLC.

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        As a result of potential differences in the amount of net taxable income allocable to Focus and to the other Focus LLC unitholders, as well as the use of an assumed tax rate in calculating Focus LLC's tax distribution obligations, Focus may receive distributions significantly in excess of its tax liabilities and obligations to make payments under the Tax Receivable Agreements. If Focus retains such cash balances, the continuing owners would benefit from any value attributable to such accumulated cash balances as a result of their exercise of an exchange right. We intend to cause Focus to take steps to eliminate any material cash balances. Such steps could include distributing such cash balances as dividends on our Class A common stock, reinvesting such cash balances in Focus LLC for additional Focus LLC units (with an accompanying stock dividend with respect to our Class A common stock), and using such cash balances to effect buybacks of shares of our Class A common stock (with an accompanying conversion rate adjustment with respect to the exchange right).

Risks Related to Financing and Liquidity

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful.

        At March 31, 2018, we had outstanding borrowings under our credit facilities of $998.0 million at stated value. Our ability to make scheduled payments on or to refinance our indebtedness, including our credit facilities, depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flow from operating activities sufficient to permit us to pay the principal and interest on our indebtedness.

        If our cash flows and capital resources are insufficient to fund debt service obligations, we may be forced to reduce or delay acquisitions or partner firm-level acquisitions and capital expenditures, sell assets, seek additional capital or restructure or refinance indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations. Our credit facilities currently restrict our ability to dispose of assets and our use of the proceeds from such disposition. We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet scheduled debt service obligations.

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

        Our credit facilities contain a number of customary covenants, including (i) incurring additional indebtedness or guarantees, (ii) creating liens or other encumbrances on property or granting negative pledges, (iii) entering into a merger or similar transaction, (iv) selling or transferring certain property and (v) declaring dividends or making other restricted payments.

        In addition, our credit facilities require us to maintain certain financial ratios. These restrictions may also limit our ability to obtain future financings, to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of acquisitions or other business opportunities that arise because of the limitations that the restrictive covenants under our credit facility impose on us.

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        A breach of any covenant in our credit facilities would result in a default under the applicable agreement after any applicable grace periods. A default, if not waived, could result in acceleration of the indebtedness outstanding under the credit facilities. The accelerated indebtedness would become immediately due and payable. If that occurs, we may not be able to make all of the required payments or borrow on short notice sufficient funds to refinance such indebtedness. Even if new financing were available at that time, it may not be on terms that are acceptable to us.

Lack of liquidity or access to capital could impair our business and financial condition.

        Liquidity, or ready access to funds, is essential to our business. We expend significant resources investing in our business, particularly with respect to acquisition activity. As a result, reduced levels of liquidity could have a significant negative effect on us and our partner firms. Some potential conditions that could negatively affect our liquidity or that of our partner firms include: (i) illiquid or volatile markets, (ii) diminished access to debt or capital markets, (iii) unforeseen cash or capital requirements or (iv) regulatory penalties or fines or adverse legal settlements or judgments.

        The capital and credit markets continue to experience varying degrees of volatility and disruption. In some cases, the markets have exerted downward pressure on availability of liquidity and credit capacity. Without sufficient liquidity, we could be required to curtail our operations.

        In the event current resources are insufficient to satisfy our needs or the needs of our partner firms, we may need to rely on financing sources such as bank debt. The availability of additional financing will depend on a variety of factors such as: (i) market conditions, (ii) the general availability of credit, including the availability of credit to the financial services industry, (iii) our credit ratings and credit capacity and (iv) the possibility that lenders could develop a negative perception of our or their long- or short-term financial prospects if the level of business activity decreases due to a market downturn. Similarly, our access to funds may be impaired if regulatory authorities or rating organizations take negative actions against us or our partner firms.

        Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital required to operate our businesses. Such market conditions may limit our ability to generate revenue to meet liquidity needs and access the capital necessary to grow our business. As such, we may be forced to delay raising capital, issue different types of capital than we would otherwise, less effectively deploy such capital or bear an unattractive cost of capital, which could decrease our profitability and significantly reduce our financial flexibility.

Risks Related to Regulation and Litigation

Our business is highly regulated.

        Our partner firms are subject to extensive regulation by various regulatory and self-regulatory authorities in the United States, the United Kingdom, Canada and Australia, as detailed in "Regulatory Environment." In the United States, our partner firms are subject to regulation primarily at the federal level, including regulation by the SEC under the Advisers Act, by the U.S. Department of Labor (the "DOL") under ERISA, regulation of broker-dealers by the SEC and the Financial Industry Regulatory Authority ("FINRA"), state insurance regulations and state securities regulation. As a publicly traded company with listed equity securities, we will be subject to the rules and regulations of the SEC and The NASDAQ Stock Market LLC ("NASDAQ").

        Providing investment advice to clients is regulated on both the federal and state level in the United States. Our partner firms are predominantly investment advisers registered with the SEC under the Advisers Act. Each firm that is a federally registered investment adviser is regulated and subject to examination by the SEC. The Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, disclosure obligations, recordkeeping and reporting requirements,

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marketing restrictions and general anti-fraud prohibitions. The failure to comply with the Advisers Act could cause the SEC to institute proceedings and impose sanctions for violations, including censure or terminating their SEC registrations and could also result in litigation or reputational harm. In addition, our partner firms who are investment advisers are subject to notice filings and the anti-fraud rules of state securities regulators under applicable state securities laws.

        The U.S. Office of Foreign Assets Control ("OFAC") has also issued regulations requiring that we and our partner firms refrain from doing business in certain countries or with certain organizations or individuals on a list maintained by the U.S. government. Our partner firms rely on custodians to ensure compliance with OFAC. A partner firm's failure to comply with applicable laws or regulations could result in fines, censure, suspension of personnel or other sanctions, including revocation of the registration of the partner firm as an RIA.

        Our partner firms also rely on exemptions from various requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") and ERISA. If for any reason these exemptions were to be revoked or challenged or otherwise become unavailable to us, our partner firms could be subject to regulatory action or third-party claims, and our business could be materially and adversely affected. To the extent any of our partner firms manage investment vehicles, those partner firms could also be subject to additional disclosure and compliance requirements. These laws and regulations impose requirements, restrictions and limitations on our business, and compliance with these laws and regulations results in significant cost and expense. If our partner firms were to fail to comply with applicable laws, rules or regulations or be named as a subject of an investigation or other regulatory action, the public announcement and potential publicity surrounding any such investigation or action could have an adverse effect on our stock price and result in increased costs even if our partner firms were found not to have violated such laws, rules or regulations. The failure of our partner firms to satisfy regulatory requirements could also result in the partner firms or us being subjected to civil liability, criminal liability or sanctions that might materially impact our business.

        Certain of our partner firms have affiliated SEC-registered broker-dealers. Broker-dealers and their personnel are regulated, to a large extent, by the SEC and self-regulatory organizations, principally FINRA. Broker-dealers are subject to regulations which cover all aspects of the securities business, including sales practices, trading practices among broker-dealers, use and safekeeping of clients' funds and securities, capital structure, recordkeeping and the conduct of directors, officers, employees and representatives. Continued efforts by market regulators to increase transparency by requiring the disclosure of conflicts of interest have affected, and could continue to impact, our partner firms' disclosures and our business.

        Certain of our partner firms have affiliated insurance brokers. State insurance laws grant supervisory agencies, including state insurance departments, broad administrative authority. State insurance regulators and the National Association of Insurance Commissioners continually review existing laws and regulations, some of which affect certain partner firms who engage in the sale of insurance products through affiliated or unaffiliated entities. These supervisory agencies regulate many aspects of the insurance business, including the licensing of insurance brokers and agents and other insurance intermediaries, and trade practices, such as marketing, advertising and compensation arrangements entered into by insurance brokers and agents.

Our international operations are subject to additional non-U.S. regulatory requirements.

        We have partner firms located in the United Kingdom, Canada and Australia. We may have partner firms located in other non-U.S. jurisdictions in the future. Failure to comply with the applicable laws, rules, regulations, codes, directives, notices or guidelines in any jurisdiction outside of the United States could result in a wide range of penalties and disciplinary actions, including fines, censures and the suspension or expulsion from a particular jurisdiction or market or the revocation of licenses, any

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of which could adversely affect our reputation and operations and our partner firms in those jurisdictions. Regulators in jurisdictions outside of the United States could also change their policies or laws in a manner that might restrict or otherwise impede the ability of such partner firms to offer wealth management services in their respective markets, or they may be unable to keep up with, or adapt to, changing, complex regulatory requirements in such jurisdictions or markets, which could further negatively impact our business.

        In the future, we may further expand our business outside of the markets in which we currently operate in such a way or to such an extent that we may be required to register with additional foreign regulatory agencies or otherwise comply with additional non-U.S. laws and regulations that do not currently apply to us. Lack of compliance with any such non-U.S. laws and regulations may increase our risk of becoming party to litigation and subject to regulatory actions. We are also subject to the enhanced risk that our differentiated partnership model might not be enforceable in some non-U.S. jurisdictions.

We and our partner firms are subject to anticorruption laws, including the U.S. Foreign Corrupt Practices Act ("FCPA"), the U.K. Bribery Act (the "Bribery Act") and the Canadian Corruption of Foreign Public Officials Act (the "CFPOA"). Certain of our partner firms are also subject to anti-money laundering ("AML") laws in the United States, the United Kingdom, Canada and Australia and may be subject to other anti-corruption laws and AML laws, as well as sanctions laws and other laws governing our and our partner firms' operations, to the extent our business expands to other non-U.S. jurisdictions. If our partner firms fail to comply with these laws, they and we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our results of operations and financial condition.

        We continue to pursue investment opportunities outside of the United States. We and our partner firms are currently subject to anti-corruption laws, including the FCPA, the Bribery Act and the CFPOA. To the extent we expand our international operations to other non-U.S. jurisdictions, our prospective partner firms may be subject to additional anti-corruption laws that apply in countries where they are doing business. The FCPA, the Bribery Act, the CFPOA and other applicable anti-corruption laws generally prohibit our partner firms, employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. Our partner firms may also participate in collaborations and relationships with third parties whose actions could potentially subject them to liability under the FCPA, the Bribery Act, the CFPOA or other jurisdictions' anti-corruption laws. In addition, we and our partner firms cannot predict the nature, scope or effect of future regulatory requirements to which their internal operations might be subject or the manner in which existing laws might be administered or interpreted.

        Our partner firms that are SEC-registered broker-dealers are also subject to AML laws and related compliance obligations under the USA PATRIOT Act and the Bank Secrecy Act ("BSA") that require that these partner firms maintain an AML compliance program covering certain of their business activities. While currently there are no AML laws and related compliance obligations with respect to the activities of RIAs, in August 2015, the Financial Crimes Enforcement Network ("FinCEN"), a bureau of the U.S. Department of the Treasury, proposed an AML rule that, if adopted, would subject our partner firms that are RIAs to the requirements of the BSA. Our partner firms that conduct business in non-U.S. jurisdictions, such as the United Kingdom and Canada, are also subject to specific AML and counter terrorist financing requirements that require them to develop and maintain AML and counter terrorist financing policies and procedures.

        There is no assurance that we will be completely effective in ensuring our partner firms' compliance with all applicable anti-corruption laws, including the FCPA, the Bribery Act and the CFPOA and AML laws in the United States, the United Kingdom, Canada and Australia. If we or our partner firms are not in compliance with the FCPA, the Bribery Act, the CFPOA or other

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anti-corruption laws or AML laws, they may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our results of operations and financial condition. Likewise, any investigation of any potential violations of the FCPA, the Bribery Act, the CFPOA or other anti-corruption laws or AML laws by authorities in the United States, the United Kingdom, Canada, Australia or other jurisdictions where we conduct business could also have an adverse impact on our reputation, results of operations and financial condition.

The regulatory environment in which our partner firms operate is subject to continuous change, and regulatory developments designed to increase oversight may adversely affect our business.

        The legislative and regulatory environment in which our partner firms operate has undergone significant changes in the recent past, including additional filings with the SEC required by investment advisory firms, which have resulted in increased costs to us. Regulatory review or the issuance of interpretations of existing laws and regulations may result in the enactment of new laws and regulations that could adversely affect our operations or our ability to conduct business profitably. We are unable to predict whether any such laws or regulations will be enacted and to what extent such laws and regulations would affect our business.

        In the United States, regulatory uncertainty continues to surround the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), which represented a comprehensive overhaul of the financial services regulatory environment and requires federal agencies to implement numerous new rules, which may impose additional restrictions and limitations on our business as they are adopted. In the United Kingdom, our business may be impacted by financial services reform initiatives enacted or under consideration in the European Union or by the United Kingdom's withdrawal from the European Union. Compliance with these new laws and regulations may also result in increased compliance costs and expenses, and non-compliance may result in fines and penalties.

        Additionally, on April 6, 2016, the DOL adopted final rules (the "DOL Fiduciary Rules") and related exemptions redefining the term "fiduciary" under ERISA and the Internal Revenue Code of 1986, as amended (the "Code") and addressing conflicts of interest in the provision of investment advice with respect to plans or accounts subject to DOL authority, particularly retirement plans and individual retirement accounts. Part of the DOL Fiduciary Rules became effective on June 9, 2017, but final implementation was delayed until July 1, 2019. On March 15, 2018, however, the U.S. Court of Appeals for the Fifth Circuit vacated the DOL Fiduciary Rules in their entirety. This ruling is subject to appeal and during the continuing appeals process the DOL Fiduciary Rules remain in effect. While in effect, the DOL Fiduciary Rules and their related exemptions impact how our partner firms provide investment advice to accounts subject to DOL authority (especially retirement plans and individual retirement accounts), the types of fees and compensation they will be able to receive in exchange for such advice and other matters.

        We believe that significant regulatory changes in the wealth management industry are likely to continue, which is likely to subject industry participants to additional, more costly and generally more detailed regulation. For example, on August 25, 2015 FinCEN proposed an AML rule that would, if adopted, subject RIAs to the requirements of the BSA. On April 18, 2018, the SEC proposed a package of rulemakings and interpretations that if adopted would impose a best interest standard of conduct for broker-dealers, require the delivery of a short-form disclosure document to retail investors, restrict the use of the term "adviser" or "advisor" by broker-dealers who are not also registered as investment advisers and clarify the SEC's views on the fiduciary duty that investment advisers owe to their clients. New laws or regulations, or changes in the enforcement of existing laws or regulations, applicable to our partner firms may adversely affect our business. Our continued ability to function in this environment will depend on our ability to monitor and promptly react to legislative and regulatory changes. Changes in laws or regulatory requirements, or the interpretation or application of such laws

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and regulatory requirements by regulatory authorities, can occur without notice and could have an adverse impact on our results of operations and financial condition. Please read "Regulatory Environment."

Our business is subject to risks related to legal proceedings and governmental inquiries.

        Our business is subject to litigation, regulatory investigations and claims arising in the normal course of operations. The risks associated with these matters often may be difficult to assess or quantify and the existence and magnitude of potential claims often remain unknown for substantial periods of time.

        Our partner firms depend to a large extent on their network of relationships and on their reputation to attract and retain clients. The principals and other wealth management professionals at our partner firms make investment decisions on behalf of clients that could result in substantial losses. If clients suffer significant losses, or are otherwise dissatisfied with wealth management services, we could be subject to the risk of legal liabilities or actions alleging negligent misconduct, breach of contract, unjust enrichment and/or fraud. Moreover, our partner firms are predominantly RIAs and have a legal obligation to operate under the fiduciary standard, a heightened standard as compared to the client suitability standard of conduct applicable to broker-dealers. These risks are often difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time, even after an action has been commenced.

        Our involvement in any investigations and lawsuits would cause us to incur additional legal and other costs and, if we were found to have violated any laws, we could be required to pay fines, damages and other costs, perhaps in material amounts. Regardless of final costs, these matters could have an adverse effect on our business by exposing us to negative publicity, reputational damage, harm to our partner firms' client relationships or diversion of personnel and management resources.

Principal or employee misconduct could expose us to significant legal liability and reputational harm.

        We are vulnerable to reputational harm because our partner firms operate in an industry in which personal relationships, integrity and the confidence of clients are of critical importance. The principals and employees at our partner firms could engage in misconduct that adversely affects our business. For example, if a principal or employee were to engage in illegal or suspicious activities, a partner firm could be subject to regulatory sanctions and we could suffer serious harm to our reputation (as a consequence of the negative perception resulting from such activities), our financial position, our partner firms' client relationships and their ability to attract new clients.

        The wealth management business often requires that we deal with confidential information. If principals or employees at our partner firms were to improperly use or disclose this information, even if inadvertently, we or our partner firms could be subject to legal action and suffer serious harm to our reputation, financial position and current and future business relationships or those of our partner firms. It is not always possible to deter misconduct, and the precautions we take to detect and prevent this activity may not always be effective. Misconduct by principals or employees at our partner firms, or even unsubstantiated allegations of misconduct, could result in an adverse effect on our reputation and our business.

Failure to properly disclose conflicts of interest and comply with fiduciary duty requirements could harm our reputation, business and results of operations.

        Some of our partner firms have affiliated SEC-registered broker-dealers and affiliated insurance brokers. Certain of our partner firms also have compensation arrangements pursuant to which they receive payments based on client assets invested in certain third-party mutual funds. Such arrangements allow a partner firm to receive payments from multiple parties based on the same client asset and can

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incentivize a partner firm to act in a manner contrary to the best interests of its clients. As investment advisors subject to a legal obligation to operate under the fiduciary standard, these partner firms must fully disclose any conflicts between their interests and those of their clients. The SEC and other regulators have increased their scrutiny of potential conflicts of interest, and our partner firms have implemented policies and procedures to mitigate conflicts of interest. However, if our partner firms fail to fully disclose conflicts of interest or if their policies and procedures are not effective, they could face reputational damage, litigation or regulatory proceedings or penalties, any of which may adversely affect our reputation, business and results of operations.

Acquisitions of newly established RIA firms formed by teams of wealth management professionals formerly employed at traditional brokerages and wirehouses expose us to litigation risk.

        As part of the Focus Independence program, we have to date, with limited exceptions acquired substantially all of the assets of new RIA firms formed by teams of wealth management professionals formerly employed at traditional brokerages and wirehouses. These acquisitions may expose us to the risk of legal actions alleging misappropriation of confidential information, including client information, unfair competition, breach of contract and tortious interference with contracts between the lift out wealth management teams and the brokerage or wirehouse. Additionally, in November 2017 two larger brokerage firms withdrew from an industry agreement known as the Protocol for Broker Recruiting or the "Broker Protocol." These withdrawals, and any additional withdrawals by signatories to the Broker Protocol, may increase the potential for such legal actions. These risks are often difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time, even after an action has been commenced. We may incur significant legal expenses in defending against litigation commenced by a brokerage or wirehouse. Substantial legal liability could have an adverse effect on our business, results of operations or financial condition or cause significant reputational harm to us.

In the event of a change of control of our company, we may be required to obtain the consent of our partner firms' advisory clients to the change of control, and any failure to obtain these consents could adversely affect our results of operations, financial condition or business.

        As required by the Investment Advisers Act of 1940, the investment advisory agreements entered into by our investment adviser subsidiaries provide that an "assignment" of the agreement may not be made without the client's consent. Under the Investment Company Act of 1940, advisory agreements with registered funds provide that they terminate automatically upon "assignment" and the board of directors and the shareholders of the registered fund must approve a new agreement for advisory services to continue. Under both the Investment Advisers Act of 1940 and the Investment Company Act of 1940, a change of ownership may constitute such an "assignment" if it is a change of control. For example, under certain circumstances, an assignment may be deemed to occur if a controlling block of voting securities is transferred, if any party acquires control, or, in certain circumstances, if a controlling party gives up control. Under the Investment Company Act of 1940, a 25% voting interest is presumed to constitute control. While we have concluded that this offering does not constitute such an assignment or a change of control, an assignment or a change of control could be deemed to occur in the future if we, or one of our investment adviser subsidiaries, were to gain or lose a controlling person, or in other situations that may depend significantly on facts and circumstances. In any such case we would seek to obtain the consent of our advisory clients, including any funds, to the assignment. To the extent of any failure to obtain these consents, our results of operations, financial condition or business could be adversely affected.

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Risks Related to the Offering and Our Class A Common Stock

The initial public offering price of our Class A common stock may not be indicative of the market price of our Class A common stock after this offering. In addition, an active, liquid and orderly trading market for our Class A common stock may not develop or be maintained, and our stock price may be volatile.

        Prior to this offering, our Class A common stock was not traded on any market. An active, liquid and orderly trading market for our Class A common stock may not develop or be maintained after this offering. Active, liquid and orderly trading markets usually result in less price volatility and more efficiency in carrying out investors' purchase and sale orders. The market price of our Class A common stock could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our Class A common stock, you could lose a substantial part or all of your investment in our Class A common stock. The initial public offering price will be negotiated between us and the representatives of the underwriters, based on numerous factors which we discuss in "Underwriting (Conflicts of Interest)," and may not be indicative of the market price of our Class A common stock after this offering. Consequently, you may not be able to sell shares of our Class A common stock at prices equal to or greater than the price paid by you in this offering.

        The following factors could affect our stock price:

        The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Class A common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company's securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management's attention and resources and harm our results of operations and financial condition.

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Certain existing owners will continue to collectively hold a substantial percentage of the voting power of our common stock.

        Holders of Class A common stock and Class B common stock will vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law or our certificate of incorporation. Upon completion of this offering (assuming no exercise of the underwriters' option to purchase additional shares), existing owners, including our private equity investors and other shareholders, will own approximately      % of our Class A common stock (representing      % of the economic interest and      % of the voting power). The continuing owners will own 100% of our Class B common stock (representing 0% of the economic interest and        % of the voting power). Please read "Security Ownership of Certain Beneficial Owners and Management."

        Although these existing owners are entitled to act separately in their own respective interests with respect to their stock in us, they will together have the ability to elect all of the members of our board of directors, and thereby to control our management and affairs. In connection with this offering, investment vehicles affiliated with Stone Point and KKR will also enter into nomination agreements pursuant to which they will have the right to nominate an aggregate of three members of our board of directors for so long as they maintain certain ownership stakes. These existing owners will be able to determine the outcome of all matters requiring shareholder approval, including mergers and other material transactions, and will be able to cause or prevent a change in the composition of our board of directors or a change in control of our company that could deprive our shareholders of an opportunity to receive a premium for their shares of Class A common stock as part of a sale of our company. The existence of significant shareholders may also have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other shareholders to approve transactions that they may deem to be in the best interests of our company.

        Moreover, this concentration of stock ownership may also adversely affect the trading price of our Class A common stock to the extent investors perceive a disadvantage in owning stock of our company.

The interests of our existing owners may differ from those of our public shareholders.

        So long as our existing owners continue to control a significant amount of our common stock, they will continue to be able to strongly influence all matters requiring shareholder approval, regardless of whether or not other shareholders believe that a potential transaction is in their own best interests. In any of these matters, the interests of the existing owners (including their interests, if any, as TRA holders) may differ or conflict with the interests of our other shareholders. For example, these existing owners may have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreements, and whether and when Focus should terminate the Tax Receivable Agreements and accelerate its obligations thereunder; provided that any decision to terminate the Tax Receivable Agreements and accelerate the obligations thereunder would also require the approval of a majority of the disinterested directors of Focus. In addition, the structuring of future transactions may take into consideration these existing owners' tax or other considerations even where no similar benefit would accrue to us. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreements."

Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock.

        Our certificate of incorporation authorizes our board of directors to issue one or more series of preferred stock, the terms of which may be established and the shares of which may be issued without

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shareholder approval, and which may include super voting, special approval, dividend, repurchase rights, liquidation preferences or other rights or preferences superior to the rights of the holders of Class A common stock. The terms of one or more classes or series of preferred stock could adversely impact the value or our Class A common stock. Furthermore, if our board of directors elects to issue preferred stock it could be more difficult for a third party to acquire us. For example, our board of directors may grant holders of preferred stock the right to elect some number of our directors in all events or upon the occurrence of specified events or the right to veto specified transactions.

        In addition, some provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our shareholders, including: (i) prohibiting us from engaging in any business combination with any interested shareholder for a period of three years following the time that the shareholder became an interested shareholder, subject to certain exceptions, (ii) establishing advance notice provisions with regard to shareholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our shareholders, (iii) providing that the authorized number of directors may be changed only by resolution of the board of directors, (iv) providing that all vacancies in our board of directors may, except as otherwise be required, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, (v) providing that our amended and restated certificate of incorporation and amended and restated bylaws may be amended by the affirmative vote of the holders of at least two-thirds of our then outstanding voting stock, (vi) providing for our board of directors to be divided into three classes of directors, (vii) providing that our amended and restated bylaws can be amended by the board of directors, (viii) limitations on the ability of shareholders to call special meetings, (ix) limitations on the ability of shareholders to act by written consent, (x) requiring the affirmative vote of the holders of a majority of the voting stock held by affiliates of Stone Point and KKR, for so long as they collectively own at least 25% of our outstanding voting stock, to amend, alter, repeal or rescind the certain provisions in our amended and restated certificate of incorporation and (xi) renouncing any interest or expectancy that we have in, or right to be offered an opportunity to participate in, any corporate or business opportunities that are from time to time presented to Stone Point, KKR, directors affiliated with these parties and their respective affiliates.

        In addition, certain change of control events have the effect of accelerating the payments due under the Tax Receivable Agreements, which could result in a substantial, immediate lump-sum payment that could serve as a disincentive to a potential acquirer of us, please see "Risks Related to Our Internal Reorganization and Resulting Structure—In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits, if any, realized in respect of the tax attributes subject to the Tax Receivable Agreements."

Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

        Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our shareholders, (iii) any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL"), our amended and restated certificate of incorporation or our bylaws or (iv) any action asserting a claim against us or any director or officer or other employee of ours that is governed by the internal affairs doctrine, in each such case

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subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Unless we consent in writing to the selection of alternative forum, to the fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the federal securities laws of the United States. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our amended and restated certificate of incorporation described in the preceding sentence. This choice of forum provision may limit a shareholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our results of operations and financial condition.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

        Our amended and restated certificate of incorporation and bylaws to be adopted in connection with this offering will provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. Our amended and restated bylaws will also permit us to purchase insurance on behalf of any officer, director, employee or other agent for any liability arising out of that person's actions as our officer, director, employee or agent, regardless of whether Delaware law would permit indemnification. We intend to enter into indemnification agreements with each of our current and future directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liability that may arise by reason of their service to us and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

        In addition, our amended and restated certificate of incorporation to be adopted in connection with this offering will limit the liability of our directors for monetary damages for breach of their fiduciary duty as directors, except for liability that cannot be eliminated under the DGCL. Delaware law provides that directors of a company will not be personally liable for monetary damages for breach of their fiduciary duty as directors, except for liabilities:

        The above limitations on liability and our indemnification obligations limit the personal liability of our directors and officers for monetary damages for breach of their fiduciary duty as directors by shifting the burden of such losses and expenses to us. Certain liabilities or expenses covered by our indemnification obligations may not be covered by our directors' and officers' liability insurance or the coverage limitation amounts may be exceeded. As a result, any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

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Investors in this offering will experience immediate and substantial dilution of $          per share.

        Purchasers of our Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of Class A common stock for accounting purposes. After giving effect to the sale of shares of Class A common stock in this offering and further assuming the receipt of the estimated net proceeds (assuming the midpoint of the price range set forth on the cover of this prospectus and after deducting the underwriting discount and estimated offering expenses payable by us), our adjusted pro forma net tangible book value as of March 31, 2018 would have been approximately $             million, or $            per share of Class A common stock. This represents an immediate increase in the net tangible book value of $            per share to our existing owners and immediate dilution (i.e., the difference between the offering price and the adjusted pro forma net tangible book value after this offering) to new investors purchasing shares of Class A common stock in this offering of $            per share. Please read "Dilution."

We do not intend to pay dividends on our Class A common stock. Consequently, your only opportunity to achieve a return on your investment is if the price of our Class A common stock appreciates.

        We do not plan to declare dividends on shares of our Class A common stock in the foreseeable future. Consequently, your only opportunity to achieve a return on your investment in us will be if you sell your shares of Class A common stock at a price greater than you paid for it. There is no guarantee that the price of our Class A common stock that will prevail in the market will ever exceed the price that you pay in this offering.

Future sales of our Class A common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

        Unitholders of Focus LLC (other than Focus) may receive shares of our Class A common stock pursuant to the exercise of an exchange right or the call right and then sell those shares of Class A common stock. Additionally, we may issue additional shares of Class A common stock or convertible securities in subsequent public offerings or as consideration for future acquisitions. After the completion of this offering, we will have              outstanding shares of Class A common stock. This number includes              shares of Class A common stock that we are selling in this offering and              shares of Class A common stock that we may sell in this offering if the underwriters' option to purchase additional shares is fully exercised, which may be resold immediately in the public market. Following the completion of this offering, the exchanging owners and the blocker owners will own              shares of Class A common stock, representing approximately      % (or      % if the underwriters' option to purchase additional shares is exercised in full) of our total outstanding common stock. All such shares will be restricted from immediate resale under the federal securities laws and under the terms of the Fourth Amended and Restated Focus LLC Agreement, which will be entered into in connection with the closing of this offering, but may be sold into the market in the future. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement—Transfer of Securities." Additionally, except as otherwise permitted by the Fourth Amended and Restated Focus LLC Agreement, continuing owners will only be permitted to exercise their exchange rights on quarterly exchange dates and with respect to one-twelfth of the units held by them at the closing of this offering, with an ability to carry forward unused exchange rights to subsequent exchange dates. The foregoing volume restrictions will apply to the PE Holders as an aggregate limitation on their ability to sell Focus LLC units or the shares of Class A common stock received in connection with the reorganization transactions. We expect that the PE Class A Holders and the continuing owners will be party to a registration rights agreement with us that will require us to effect the registration of their shares in certain circumstances, without being subject to the preceding limitations, no earlier than the expiration of the lock-up period contained in the Fourth Amended and

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Restated Focus LLC Agreement entered into in connection with the closing of this offering. Our director, director nominees, executive officers, all of our other existing owners and persons that purchase shares through our directed share program will, subject to certain exceptions, be subject to certain restrictions on the sale of their shares for 180 days after the date of this prospectus; however, after such period, and subject to compliance with the Securities Act or exemptions therefrom, these persons may sell such shares into the public market. Please read "Shares Eligible for Future Sale" and "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

        In connection with this offering, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of              shares of our Class A common stock issued or reserved for issuance under our equity incentive plan. Subject to the satisfaction of vesting conditions and the expiration of lock-up periods, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction.

        We cannot predict the size of future issuances of our Class A common stock or securities convertible into Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock will have on the market price of our Class A common stock. Sales of substantial amounts of our Class A common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A common stock.

We may seek to finance acquisitions of partner firms by issuing equity securities that would dilute your ownership.

        We may finance future acquisitions through the issuance of equity securities, including common units and our Class A common stock. Acquisitions financed with the issuance of common units could significantly reduce our percentage ownership of Focus LLC. Furthermore, the new holders of common units may receive shares of our Class A common stock pursuant to the exercise of an exchange right or the call right, which may have a dilutive impact on your ownership interest.

        Acquisitions financed with the issuance of our Class A common stock could be dilutive to the share value and voting power of our existing Class A common stock, which could affect the market price of our Class A common stock.

The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our Class A common stock.

        Our director, director nominees, executive officers, all of our other existing owners and all persons that purchase shares through our directed share program will, subject to certain exceptions, be subject to certain resale restrictions with respect to our Class A common stock, our Class B common stock, any membership interests in Focus LLC or any securities convertible into or exercisable or exchangeable for such common stock or membership interests for a period of 180 days from the date of this prospectus. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement—Transfer of Securities" and "Underwriting (Conflicts of Interest)—No Sales of Similar Securities." The representatives for the underwriters, at any time and without notice, may upon request release all or any portion of the shares of Class A common stock subject to the foregoing lock-up agreements. If the restrictions under the lock-up agreements are waived, then such shares will be available for sale into the public markets, which could cause the market price of our Class A common stock to decline and impair our ability to raise capital.

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For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

        We are classified as an "emerging growth company" under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor's attestation report on management's assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal year, have more than $700.0 million in market value of our Class A common stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.

        To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Class A common stock to be less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

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A LETTER FROM RUEDIGER ADOLF

        This letter should be read in the context of the disclosures made in the entire prospectus, including the information under the heading "Risk Factors" appearing elsewhere in this prospectus.

        Going public is a big step in the evolution of any business. It is an even bigger step for a wealth management business that evolved from my kitchen table in 2004.

        As a McKinsey & Company consultant and an industry executive at American Express, I had a deep understanding of the wealth management industry but was saddened by the quality of advice available to investors. It was clear to me that investors receiving "advice" based on the low suitability standard from employees working for too large, inflexible institutions with legacy systems, lack of transparency and limited, often proprietary choices, compensated by commissions and with large overheads and inferior economics was not the model of the future: The traditional market leaders may continue to lose market share for years to come!

        Through my travels, I encountered a superior model that is held to a higher standard of care, that is closer to the client than any large institution could ever be and that—I strongly believe—is more closely aligned with clients' interests: this is the world of the registered investment advisor, or RIA, long working away from the limelight but now the place-to-be for clients seeking superior wealth management services. RIAs are held to the fiduciary standard with a duty to place the interest of their clients above their own and to act in their client's best interest with due care and sense of loyalty, interestingly, principles that date back 4,000 years to the Code of Hammurabi.

        However, the more I learned about the RIA model, the more I believed it could be even more successful. What if a business existed that could:

        Equipped with a fresh and differentiated approach, as well as access to plenty of capital, such a business could provide a tremendous service to the RIA industry and its clients.

        There was a final, critical lesson I had learned in my childhood days working for my dad's highly respected accounting firm that he had founded: "Never, never turn a successful entrepreneur into an employee." RIAs are entrepreneurs and, as fiduciaries, they are ferociously independent. As banks that acquire RIAs have consistently demonstrated: "If you turn the entrepreneur into an employee, you destroy what you just acquired!"

        When I walk into the offices of my partner firms or prospects, it often feels like walking into exactly the type of office my father had built. There is tremendous pride in what they accomplish, and most importantly, pride in serving their clients in the best way they possibly can.

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        The opportunity was identified, the objectives were set, but how could such a business be built?

        Focus is a business that really did start with a sketch on a napkin at my kitchen table, followed by talking to many people about the idea (most of whom advised me to "get a real job"). However, two former colleagues from American Express and McKinsey & Company were compelled by the vision: my two co-founders Lenny Chang and Rajini Kodialam. The three of us developed the detailed economic, legal and operational model and inspired our first group of partner firms to join our vision and launch the business in 2006.

        Yes, there were surprises, and it is important to highlight them:

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        Our business has achieved considerable success, has strong access to capital and has created attractive returns for our principals and the existing owners of Focus. So why are we considering going public? We believe that Focus will benefit from:

        We recognize that being a public company comes with responsibility that goes beyond just the legal standards. We intend to manage Focus with a high level of transparency and continue to invest carefully and manage the business with a long-term perspective motivated by business fundamentals. In this way, we aim to preserve the sense of responsibility I learned through my father's business and that we share with all of the entrepreneurs who are members of our partnership.

        In the same vein, a business that adds value creates shareholder returns. We recognize that Focus's capital will be your capital and that our responsibility is to manage it prudently.

        We are proud of the scale that we have already achieved, but we believe that Focus will continue to have terrific opportunities ahead:

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        It is our aspiration to be the partnership of choice for entrepreneurial, growth-oriented and sophisticated wealth management firms who "have their heart in the right place" and are committed to outstanding wealth management services for their clients.

        Thank you for your interest in Focus. I am honored to lead this organization and grateful to our partner firms and the countless people who believed in our vision and trusted our leadership.

        On behalf of our partner firms, my two co-founders and our colleagues, I would like to invite you to invest in our unique business and support our transition to the next level in market leadership!

        Rudy

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        Some of the information in this prospectus may contain forward-looking statements. Forward-looking statements give our current expectations, contain projections of results of operations or of financial condition, or forecasts of future events. Words such as "may," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "plan," "estimate," "anticipate," "believe," "project," "budget," "potential," "continue," "will" and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this prospectus. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include fluctuations in wealth management fees, our reliance on our partner firms and the principals who manage their businesses, our ability to make successful acquisitions, unknown liabilities of or poor performance by acquired businesses, harm to our reputation, our inability to facilitate smooth succession planning at our partner firms, our inability to compete, our reliance on key personnel, our inability to attract, develop and retain talented wealth management professionals, our inability to retain clients following an acquisition, write down of goodwill and other intangible assets, our failure to maintain and properly safeguard an adequate technology infrastructure, cyber-attacks, our inability to recover from business continuity problems, inadequate insurance coverage, the termination of management agreements by management companies, our inability to generate sufficient cash to service all of our indebtedness, the failure of our partner firms to comply with applicable U.S. and non-U.S. regulatory requirements, legal proceedings and governmental inquiries and certain factors discussed in the "Risk Factors" section of this prospectus.

        All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Our forward-looking statements speak only as of the date of this prospectus or as of the date as of which they are made. Except as required by applicable law, including federal securities laws, we do not intend to update or revise any forward-looking statements.

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INTERNAL REORGANIZATION

Summary of Offering Structure

        This offering is conducted through an "Up-C" structure, which is often used by partnerships and limited liability companies when they go public. An Up-C structure allows the equity holders in an entity that is treated as a partnership for U.S. federal income tax purposes to retain and realize tax benefits associated with their continued ownership interest following an initial public offering.

        Focus Financial Partners Inc. was incorporated as a Delaware corporation in July 2015. In connection with the closing of this offering, we will enter into the Fourth Amended and Restated Focus LLC Agreement. Following this offering and the reorganization transactions described below, Focus will be a holding company and its sole material asset will be a membership interest in Focus LLC. Focus LLC directly or indirectly owns all of the outstanding equity interests in Focus Operating, LLC, through which we hold our partner firms. Focus will be the sole managing member of Focus LLC, will be responsible for all operational, management and administrative decisions of Focus LLC and will consolidate the financial results of Focus LLC and its operating subsidiaries. All other membership interests in Focus LLC will be non-voting.

        Investors in this offering will purchase shares of our Class A common stock. Focus will use a portion of the proceeds to purchase outstanding Focus LLC units from certain existing owners other than our private equity investors (as defined below). In addition, certain existing owners will exchange all or a portion of their Focus LLC units for shares of our Class A common stock and, in some cases, receive either compensatory stock options or non-compensatory stock options and cash. Certain existing owners will continue to hold Focus LLC units representing economic, non-voting interests in Focus LLC and receive shares of our Class B common stock.

        The Class A and Class B common stock will generally vote together as a single class on all matters submitted to a vote of shareholders. The Class B common stock will not have any economic rights.

Reorganization Transactions

        In connection with this offering, we will effect an internal reorganization, which we refer to as the "reorganization transactions." The existing equity interests in Focus LLC consist of convertible preferred units, common units and incentive units. Each incentive unit has a hurdle amount, which is similar to the exercise price of a stock option. The owners of existing Focus LLC units, whom we refer to as the "existing owners," primarily include (i) affiliates of Stone Point, KKR and Centerbridge Partners, L.P., whom we refer to as our "private equity investors," (ii) members of management, (iii) current and former principals and (iv) current and former employees of us and our partner firms.

        We will implement the following steps in connection with this offering:

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        We refer to existing owners who will hold common units or incentive units in Focus LLC after the reorganization transactions, including common units converted from convertible preferred units, as "continuing owners." In connection with this offering, Focus will issue shares of its Class B common stock to the continuing owners who hold vested common units in exchange for their assignment to Focus of their voting rights in Focus LLC. Each such owner will receive one share of Class B common stock for each vested common unit held. Continuing owners holding unvested common units will receive Class B common stock only upon vesting of such units. Continuing owners holding incentive units will not receive any Class B common stock.

        Shares of Class B common stock will not entitle their holders to any economic rights. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law. Each share of Class B common stock will entitle its holder to one vote. We do not intend to list the Class B common stock on any stock exchange. Continuing owners holding unvested common units will not have any voting rights until such units vest. Continuing owners holding incentive units will not have any voting rights.

Structure Upon Completion of Offering

        From the proceeds received in this offering after deducting the underwriting discount and estimated offering expenses payable by us:

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        Upon completion of the reorganization transactions and this offering:

        Each unitholder of Focus LLC (other than Focus) will, subject to certain limitations, have the right to cause Focus LLC to redeem all or a portion of its vested common units and vested incentive units, which we refer to as an "exchange right." Upon an exercise of an exchange right with respect to vested incentive units, such incentive units will first be converted into a number of common units that takes into account the then-current value of the common units and such incentive units' aggregate hurdle amount. Upon an exercise of an exchange right with respect to vested common units, and immediately after the conversion of vested incentive units into common units as described in the preceding sentence, Focus LLC will acquire each tendered common unit for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends reclassification and other similar transactions or (ii) an equivalent amount of cash. In addition, in connection with any redemption of vested common units (other than common units received upon a conversion of incentive units as described in this paragraph), the corresponding shares of Class B common stock will be cancelled. Alternatively, upon the exercise of any exchange right, Focus (instead of Focus LLC) will have the right to acquire each tendered common unit (and corresponding share of Class B common stock, as applicable) from the exchanging unitholder for, at its election, (i) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends reclassification and other similar transactions or (ii) an equivalent amount of cash, which we refer to as our "call

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right." The exchange rights will be subject to certain limitations and restrictions intended to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement."

Liquidity Rights and Limitations

        All existing and continuing owners will, subject to certain exceptions, be restricted from selling or transferring any shares of Class A common stock or any other of our equity securities for 180 days after the date of this prospectus. Please read "Certain Relationships and Related Party Transactions—Fourth Amended and Restated Focus LLC Agreement—Transfer of Securities" and "Underwriting (Conflicts of Interest)—No Sales of Similar Securities."

        Following the expiration of this 180-day period and except as otherwise permitted by the Fourth Amended and Restated Focus LLC Agreement, continuing owners will be restricted in exchanging Focus LLC units beneficially owned by them at the closing of this offering, such that they may exchange only up to one-third of such beneficially owned units per year, with certain carry-forward rights, and subject to certain exceptions, all as described below. The foregoing volume restrictions will apply to the PE Holders as an aggregate limitation on their ability to sell Focus LLC units or the shares of Class A common stock received in connection with the reorganization transactions.

        Except for certain additional liquidity rights provided under the registration rights agreement described below and except as otherwise permitted by the Fourth Amended and Restated Focus LLC Agreement, continuing owners will only be permitted to exercise their exchange rights on quarterly exchange dates and with respect to one-twelfth of the units held by them at the closing of this offering, with an ability to carry forward unused exchange rights to subsequent exchange dates. The foregoing volume restrictions will apply to the PE Holders as an aggregate limitation on their ability to sell Focus LLC units or the shares of Class A common stock received in connection with the reorganization transactions.

        Pursuant to a registration rights agreement, we will file a shelf registration statement to permit the resale of shares of Class A common stock held by PE Holders or issuable upon the exercise of exchange rights by continuing owners as soon as practicable following the one year anniversary of this offering.

        The PE Holders will have the right to demand up to three secondary underwritten offerings per year. We may initiate one additional underwritten offering per year for the benefit of the other continuing owners.

        The PE Holders and the other continuing owners may have participation rights with respect to any such underwritten offerings. We may also participate on a primary basis and issue and sell shares of our Class A common stock for our own account. We will use the proceeds from any such offering to purchase outstanding Focus LLC units from continuing owners and pay related fees and expenses. In the event of any underwriter cutbacks, all participating holders will be treated equally and included pro rata based on their ownership of registrable shares at the closing of this offering.

        The PE Holders and the other continuing owners will also have piggyback registration rights with respect to other underwritten offerings by us under certain circumstances.

        We expect that future unitholders in certain instances may also be granted registration rights in connection with future acquisitions by Focus LLC, but on terms that are not superior to the registration rights of the continuing owners. Please read "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

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        In addition, continuing owners will be subject to certain transfer restrictions under the Fourth Amended and Restated Focus LLC Agreement, which will be entered into in connection with the closing of this offering, intended to ensure that Focus LLC will continue to be treated as a partnership for U.S. federal income tax purposes.

Tax Receivable Agreements

        Focus's acquisition (or deemed acquisition for U.S. federal income tax purposes) of Focus LLC units in connection with this offering or pursuant to an exercise of an exchange right or the call right is expected to result in adjustments to the tax basis of the tangible and intangible assets of Focus LLC and such adjustments will be allocated to Focus. Moreover, following Focus's acquisition or deemed acquisition of Focus LLC units and of the blockers, Focus will be allocated adjustments to the tax basis of the tangible and intangible assets of Focus LLC as a result of the acquisition in July 2017 of convertible preferred units by our private equity investors and certain of the blockers owned by our private equity investors. These adjustments would not have been available to Focus absent its acquisition or deemed acquisition of Focus LLC units or its acquisition of the blockers and are expected to reduce the amount of cash tax that Focus would otherwise be required to pay in the future.

        In connection with the closing of this offering, Focus will enter into two Tax Receivable Agreements with the TRA holders. The term of each Tax Receivable Agreement will commence upon the closing of this offering and will continue until all tax benefits that are subject to such Tax Receivable Agreement have been utilized or expired, unless we experience a change of control (as defined in the Tax Receivable Agreement, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), and we make the termination payments specified in the Tax Receivable Agreements. The Tax Receivable Agreements generally provide for the payment by Focus to each TRA holder of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that Focus actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after this offering as a result of, as applicable to the relevant TRA holder, (i) certain increases in tax basis that occur as a result of Focus's acquisition or deemed acquisition (for U.S. federal income tax purposes) of all or a portion of such TRA holder's units in connection with this offering or pursuant to the exercise of an exchange right or the call right, (ii) the increases in tax basis relating to the July 2017 acquisition by our private equity investors that will be available to Focus as a result of its acquisition of the blockers in connection with this offering and (iii) imputed interest deemed to be paid by Focus as a result of, and additional tax basis arising from, any payments Focus makes under the relevant Tax Receivable Agreement. We will retain the benefit of the remaining 15% of the cash savings.

        Because Focus is a holding company with no operations of its own, Focus's ability to make payments under the Tax Receivable Agreements is dependent on the ability of Focus LLC to make distributions to Focus in an amount sufficient to cover its obligations under the Tax Receivable Agreements. See "Risk Factors—Risks Related to Our Internal Reorganization and Resulting Structure—Focus is a holding company. Focus's sole material asset after completion of this offering will be its equity interest in Focus LLC and Focus will be accordingly dependent upon distributions from Focus LLC to pay taxes, make payments under the Tax Receivable Agreements and cover its corporate and other overhead expenses." If we experience a change of control (as defined under the Tax Receivable Agreements, which includes certain mergers, asset sales and other forms of business combinations) or the Tax Receivable Agreements terminate early (at our election or as a result of our breach), Focus could be required to make a substantial, immediate lump-sum payment.

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USE OF PROCEEDS

        We expect the net proceeds from this offering to be approximately $             million, assuming an initial public offering price of $            per share (the midpoint of the price range set forth on the cover of this prospectus) and after deducting the underwriting discount and estimated offering expenses payable by us of approximately $             million, in the aggregate.

        Focus intends to use the net proceeds from this offering to pay $             million to mandatorily exchanging owners of vested incentive units and pay $             million to exchanging owners that elect to sell their Focus LLC units.

        Focus intends to contribute $         million of the net proceeds from this offering to Focus LLC (or $         million if the underwriters exercise their option to purchase additional shares in full) in exchange for                        common units. Focus LLC will use $             million of such contribution amount to reduce indebtedness under our credit facilities.

        The remaining $             million of such contribution amount (or $             million if the underwriters exercise their option to purchase additional shares in full) will be used by Focus LLC for acquisitions and general corporate business purposes and to pay the expenses of this offering.

        Borrowings under our credit facilities were primarily made for acquisitions, cash liquidity for unitholders and other general business purposes. As of March 31, 2018, we had outstanding borrowings of $998.0 million at stated value under our credit facilities. For the three months ended March 31, 2018, the weighted-average interest rate under our credit facilities was approximately 6%. As of March 31, 2018, we had outstanding letters of credit in the amount of $2.5 million, bearing interest at an annual rate of approximately 3%. After payoff of our second lien term loan, the remaining credit facilities will consist of our first lien term loan and first lien revolving credit facility, which have July 2024 and July 2022 maturity dates, respectively. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Credit Facilities."

        A $1.00 increase or decrease in the assumed initial public offering price of $            per share would cause the net proceeds from this offering, after deducting the underwriting discount and estimated offering expenses, received by us to increase or decrease, respectively, by approximately $             million, assuming the number of shares offered by us as set forth on the cover of this prospectus remains the same. An increase or decrease of 1,000,000 shares from the expected number of shares of Class A common stock to be sold by us in this offering would cause the net proceeds received by us to increase or decrease, respectively, by approximately $             million, assuming the assumed initial public offering price per share (the midpoint of the price range set forth on the cover of this prospectus) remains the same. Any increase or decrease in proceeds due to a change in the initial public offering price or number of shares issued would increase or decrease, respectively, the amount of net proceeds contributed to Focus LLC to be used by it for acquisitions and general corporate business purposes.

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DIVIDEND POLICY

        We do not anticipate declaring or paying any cash dividends to holders of our Class A common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements, the amount of distributions to us from Focus LLC and other factors that our board of directors may deem relevant. Because we are a holding company, our cash flow and ability to pay dividends depends upon the financial results and cash flows of our operating subsidiaries and the distribution or other payment of cash to us in the form of dividends or otherwise from Focus LLC.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2018:

        You should read the following table in conjunction with "Internal Reorganization," "Use of Proceeds," "Selected Historical and Pro Forma Consolidated Financial Data," "Unaudited Pro Forma Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

 
  As of March 31, 2018  
 
  Actual(1)   Pro Forma(2)  
 
  (dollars in thousands)
 

Cash and cash equivalents

  $ 27,949   $    

First Lien Term Loan

  $ 791,025   $    

Second Lien Term Loan

    207,000        

Unamortized debt financing costs

    (3,963 )      

Unamortized discount

    (1,877 )      

Borrowings under credit facilities

  $ 992,185        

Redeemable common and incentive units

    166,249        

Convertible preferred units

    698,500        

Total mezzanine equity

  $ 864,749   $    

Equity:

             

Class A common stock, $0.01 par value;            shares authorized (pro forma);              shares issued and outstanding (pro forma)

           

Class B common stock, $0.01 par value,            shares authorized (pro forma);              shares issued and outstanding (pro forma)

           

Additional paid-in capital

           

Total members' deficit/shareholders' equity

    (780,629 ) $    

Total capitalization

  $ 1,076,305   $    

(1)
Focus was incorporated in July 2015. The data in this table has been derived from the historical consolidated financial statements of our accounting predecessor, Focus LLC, included elsewhere in this prospectus.

(2)
A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total shareholders' equity and total capitalization by $             million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares from the expected number of shares of Class A common stock to be sold by us in this offering would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total shareholders' equity and total capitalization by $             million, assuming the assumed initial public offering price per share (the midpoint of the price range set forth on the cover of this prospectus) remains the same and after deducting the underwriting discount and estimated offering expenses payable by us.

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DILUTION

        Purchasers of our Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of Class A common stock for accounting purposes. Our net tangible book value as of March 31, 2018, after giving pro forma effect to the reorganization transactions described under "Internal Reorganization" and "Unaudited Pro Forma Consolidated Financial Information," was approximately $             million, or $            per share of Class A common stock. Pro forma net tangible book value per share is determined by dividing our pro forma tangible net worth (tangible assets less total liabilities), inclusive of convertible preferred units that will be converted into common units in connection with the reorganization transactions, by the total number of outstanding shares of Class A common stock that will be outstanding immediately prior to the closing of this offering, including giving effect to our internal reorganization. After giving effect to the sale of shares of Class A common stock in this offering and further assuming the receipt of the estimated net proceeds (assuming the midpoint of the price range set forth on the cover of this prospectus and after deducting the underwriting discount and estimated offering expenses payable by us), our adjusted pro forma net tangible book value as of March 31, 2018 would have been approximately $             million, or $            per share of Class A common stock. This represents an immediate increase in the net tangible book value of $            per share to our existing owners and immediate dilution (i.e., the difference between the offering price and the adjusted pro forma net tangible book value after this offering) to new investors purchasing shares of Class A common stock in this offering of $            per share. The following table illustrates the per share dilution to new investors purchasing shares in this offering (assuming that 100% of the outstanding Focus LLC common units and incentive units have been exchanged for Class A common stock):

Assumed initial public offering price per share

  $               

Pro forma net tangible book value per share as of March 31, 2018 (after giving effect to our internal reorganization)

                  

Increase per share attributable to new investors in the offering

                  

Adjusted pro forma net tangible book value per share (after giving effect to our internal reorganization and this offering)

                  

Dilution in pro forma net tangible book value per share to new investors in this offering(1)

                  

(1)
If the initial public offering price were to increase or decrease by $1.00 per share, then dilution in pro forma net tangible book value per share to new investors in this offering would equal $            or $            , respectively.

        The following table summarizes, on an adjusted pro forma basis as of March 31, 2018, the total number of shares of Class A common stock owned by existing owners (assuming that 100% of the outstanding Focus LLC common units and incentive units have been exchanged for Class A common stock) and to be owned by new investors, the total consideration paid, and the average price per share paid by our existing owners and to be paid by new investors in this offering at $            (the midpoint of the price range set forth on the cover of this prospectus) calculated before deduction of the estimated underwriting discount.

 
  Shares Purchased   Total Consideration    
 
 
  Average
Price
Per Share
 
 
  Number   Percent   Amount   Percent  
 
  (dollars in thousands, except per share data)
 

Existing owners

                                  % $                               % $               

Investors in this offering

                                  % $                               % $               

Total

                                  % $                               % $               

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        If the underwriters' option to purchase additional shares is exercised in full, the number of shares held by new investors will be increased to                        , or approximately         % of the total number of shares of Class A common stock. Assuming the number of shares of Class A common stock offered by us, as set forth on the cover of this prospectus, remains the same, after deducting the underwriting discount and estimated offering expenses payable by us, a $1.00 increase or decrease in the assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover of this prospectus, would increase or decrease, respectively, total consideration paid by new investors and total consideration paid by all shareholders by approximately $             million.

        To the extent that (i) we grant options to our employees in the future and those options are exercised, (ii) other issuances of Class A common stock are made or (iii) other issuances of common units or grants of incentive units are made and those units are exchanged for Class A common stock, there will be further dilution to new investors.

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SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

        Focus Financial Partners Inc. was formed in July 2015 and does not have historical financial operating results. The following table shows selected historical and pro forma consolidated financial data of our accounting predecessor, Focus Financial Partners, LLC, for the periods and as of the dates presented. Focus Financial Partners, LLC was formed on November 30, 2004.

        The selected historical consolidated financial data as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 were derived from the audited historical consolidated financial statements of our accounting predecessor included elsewhere in this prospectus. The summary historical consolidated financial data as of December 31, 2013, 2014 and 2015 and for the years ended December 31, 2013 and 2014 were derived from the audited historical consolidated financial statements of our accounting predecessor not included in this prospectus. The summary unaudited historical consolidated financial data for the three months ended March 31, 2017 and as of and for the three months ended March 31, 2018 were derived from the unaudited condensed consolidated financial statements of our accounting predecessor included elsewhere in this prospectus. The summary unaudited historical balance sheet data as of March 31, 2017 were derived from unaudited condensed consolidated financial statements of our accounting predecessor not included in this prospectus. The summary unaudited historical consolidated financial data has been prepared on a consistent basis with the audited consolidated financial statements of Focus Financial Partners, LLC. In the opinion of management, such summary unaudited historical consolidated financial data reflects all adjustments, consisting of normal recurring adjustments, considered necessary to present our financial position for the periods presented. The results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the full year. Our historical results are not necessarily indicative of statements of financial position or results of operations as of any future date or for any future period.

        The selected unaudited pro forma consolidated statement of operations data for the year ended December 31, 2017 has been prepared to give pro forma effect to (i) the reorganization transactions described under "Internal Reorganization", (ii) this offering and the application of the net proceeds from this offering and (iii) the SCS Acquisition as if they had each been completed as of January 1, 2017. The summary unaudited pro forma consolidated statement of operations data for the three months ended March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of January 1, 2017, with the exception of the SCS Acquisition, which is included in the unaudited consolidated statement of operations data of our accounting predecessor for the three months ended March 31, 2018. The selected unaudited pro forma consolidated balance sheet data as of March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of March 31, 2018, with the exception of the SCS Acquisition, which is included in the unaudited balance sheet of our accounting predecessor as of March 31, 2018. The selected unaudited pro forma consolidated financial data are presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the reorganization transactions, this offering and the SCS Acquisition been consummated on the dates indicated and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period.

        You should read the following table in conjunction with "Internal Reorganization," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," the historical consolidated financial statements of our accounting predecessor included elsewhere in this prospectus and the pro forma consolidated financial statements of Focus Financial Partners Inc. set forth under "Unaudited Pro Forma Consolidated Financial Information." Among other things, the

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historical and pro forma financial statements include more detailed information regarding the basis of presentation for the following information.

 
  Focus Financial Partners, LLC   Focus Financial Partners Inc.
Pro Forma
 
 
   
   
   
   
   
  Three Months Ended
March 31,
 
 
  Year Ended December 31,    
  Three Months
Ended
March 31,
2018
 
 
  Year Ended
December 31,
2017
 
 
  2013   2014   2015   2016   2017   2017   2018  
 
  (dollars in thousands, except per share data)
 

Consolidated Statements of Operations Data:

                                                       

Revenues

  $ 268,935   $ 325,574   $ 382,347   $ 485,444   $ 662,887   $ 135,546   $ 196,229   $     $    

Operating expenses

    251,903     304,549     361,030     447,161     657,134     124,152     183,683              

Income from operations

    17,032     21,025     21,317     38,283     5,753     11,394     12,546              

Other expense, net

    (7,380 )   (8,817 )   (11,347 )   (21,580 )   (55,613 )   (6,501 )   (23,424 )            

Income (loss) before income tax

    9,652     12,208     9,970     16,703     (49,860 )   4,893     (10,878 )            

Income tax expense (benefit)

    975     212     649     981     (1,501 )   442     1,176              

Net income (loss)

  $ 8,677   $ 11,996   $ 9,321   $ 15,722   $ (48,359 ) $ 4,451   $ (12,054 ) $     $    

Net income (loss) per share of Class A common stock:

                                                       

Basic

  $     $    

Diluted

  $     $    

Consolidated Balance Sheets Data (at period end):

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Cash and cash equivalents

  $ 16,668   $ 9,086   $ 15,499   $ 16,508   $ 51,455   $ 17,815   $ 27,949   $     $    

Total assets

    381,334     404,467     550,670     752,941     1,234,837     814,765     1,254,519              

Total liabilities

    251,977     257,130     418,871     562,339     1,148,749     605,862     1,170,399              

Total mezzanine equity

    348,817     369,574     405,347     452,485     864,749     468,416     864,749              

Total members' deficit/shareholders' equity

    (219,460 )   (222,237 )   (273,548 )   (261,883 )   (778,661 )   (259,513 )   (780,629 )            

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Revenue Metrics:

                                                       

Revenue growth(1) from prior period

    28.9 %   21.1 %   17.4 %   27.0 %   36.6 %   17.0 %   44.8 %            

Organic revenue growth(2) from prior period

    12.2 %   14.2 %   5.5 %   5.2 %   13.4 %   9.3 %   17.6 %            

Management Fees Metrics (operating expense):

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Management fees growth(3) from prior period

    41.4 %   21.7 %   13.4 %   28.0 %   42.5 %   25.6 %   39.3 %            

Organic management fees growth(4) from prior period

    16.5 %   16.9 %   1.9 %   3.6 %   23.0 %   17.7 %   24.5 %            

Adjusted EBITDA Metrics:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Adjusted EBITDA(5)

  $ 55,717   $ 67,755   $ 75,442   $ 103,038   $ 145,226   $ 28,198   $ 44,221   $     $    

Adjusted EBITDA growth(5) from prior period

    29.4 %   21.6 %   11.3 %   36.6 %   40.9 %   17.6 %   56.8 %            

Adjusted Net Income Metrics:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Adjusted Net Income(6)

  $ 45,345   $ 55,870   $ 60,538   $ 77,504   $ 96,553   $ 20,627   $ 28,302   $     $    

Adjusted Net Income growth(6) from prior period

    39.5 %   23.2 %   8.4 %   28.0 %   24.6 %   18.1 %   37.2 %            

Other Metrics:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Acquired Base Earnings(7)

  $ 5,009   $ 5,327   $ 15,586   $ 23,217   $ 44,191   $ 6,793   $ 2,750              

Number of partner firms at period end(8)

    27     30     36     42     51     45     52              

(1)
Represents growth in our GAAP revenue.

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(2)
Organic revenue growth represents the year-over-year growth in revenue related to partner firms, including growth related to acquisitions of wealth management practices and customer relationships by our partner firms and partner firms that have merged, that (i) for the annual periods presented, are included in our consolidated statements of operations for each of the entire fiscal year-periods presented and (ii) for the three month-periods presented, are included in our consolidated statements of operations for each of the entire three month-periods presented. We believe these growth statistics are useful in that they present full-period revenue growth of partner firms on a "same store" basis exclusive of the effect of the partial period results of partner firms that are acquired during the comparable periods.

(3)
The terms of our management agreements entitle the management companies to management fees typically consisting of all EBPC in excess of Base Earnings up to Target Earnings, plus a percentage of any EBPC in excess of Target Earnings. Management fees growth represents the year-over-year growth in GAAP management fees earned by management companies. While an expense, we believe that growth in management fees reflect the strength of the partnership.

(4)
Organic management fees growth represents the year-over-year growth in management fees earned by management companies related to partner firms, including growth related to acquisitions of wealth management practices and customer relationships by our partner firms and partner firms that have merged, that (i) for the annual periods presented, are included in our consolidated statements of operations for each of the entire fiscal year-periods presented and (ii) for the three month-periods presented, are included in our consolidated statements of operations for each of the entire three month-periods presented. We believe that these growth statistics are useful in that they present full-period growth of management fees on a "same store" basis exclusive of the effect of the partial period results of partner firms that are acquired during the comparable periods.

(5)
Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business."

(6)
Adjusted Net Income is a non-GAAP financial measure. For a definition of Adjusted Net Income and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—How We Evaluate Our Business."

(7)
Pursuant to our management agreements, we retain a cumulative preferred position in Base Earnings, which we refer to as Acquired Base Earnings. For additional information regarding Acquired Base Earnings, please read "—Acquired Base Earnings."

(8)
Represents the number of partner firms on the last day of the period presented. For the applicable period end, the number of partner firms has been reduced for partner firms that merged with existing partner firms prior to the last day of the period. Subsequent to March 31, 2018 through the date of this prospectus, we completed the acquisition of three additional partner firms.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

        Focus Financial Partners Inc. was formed in July 2015 and does not have historical financial operating results. The following unaudited pro forma consolidated financial statements of Focus Financial Partners Inc. are based on the historical consolidated financial statements of our accounting predecessor, Focus Financial Partners, LLC, included elsewhere in this prospectus. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2017 has been prepared to give pro forma effect to (i) the reorganization transactions described under "Internal Reorganization" elsewhere in this prospectus and this offering and the application of the net proceeds from this offering as if they had been completed as of January 1, 2017 and (ii) the SCS Acquisition as though it was completed on January 1, 2017. The unaudited pro forma consolidated statement of operations data for the three months ended March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of January 1, 2017, with the exception of the SCS Acquisition, which is included in the unaudited consolidated statement of operations data of our accounting predecessor for the three months ended March 31, 2018. The unaudited pro forma consolidated balance sheet as of March 31, 2018 has been prepared to give pro forma effect to these transactions as if they had been completed as of March 31, 2018, with the exception of the SCS Acquisition, which is included in the unaudited balance sheet of our accounting predecessor as of March 31, 2018. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of the reorganization transactions, this offering and the SCS Acquisition on the historical financial information of Focus Financial Partners, LLC.

        The unaudited pro forma consolidated financial information should be read together with "Internal Reorganization," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements of Focus Financial Partners, LLC and related notes included elsewhere in this prospectus.

        Upon completion of this offering, we expect our operating expenses to increase as a result of being a publicly traded company, including annual and quarterly report preparation, tax return preparation, independent auditor fees, investor relations activities, transfer agent fees, incremental director and officer liability insurance costs and independent director compensation. We also expect our accounting, legal, tax and personnel-related expenses to increase as we supplement our compliance and governance functions, maintain and review internal controls over financial reporting and prepare and distribute periodic reports as required by the rules and regulations of the SEC. The unaudited pro forma consolidated financial statements do not reflect these increased expenses.

        The unaudited pro forma consolidated financial information is included for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the reorganization transactions and this offering been consummated on the dates indicated, and does not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period.

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Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 2017
(dollars in thousands, except per share data)

 
  Focus Financial
Partners, LLC
Historical
  SCS Financial
Services, LLC
and Subsidiaries
  Pro Forma
Adjustments
  Pro Forma
Adjustments
Note
  Subtotal   Pro Forma
Adjustments
  Pro Forma
Adjustments
Note
  Focus Financial
Partners Inc.
Pro Forma
 

REVENUES:

                                               

Wealth management fees

  $ 617,124   $ 24,722                     $                    $               

Other

    45,763                                        

Total revenues

    662,887     24,722                                    

OPERATING EXPENSES:

                                               

Compensation and related expenses               

    265,555     20,599           (f )             (a)        

Management fees

    163,617               (f )                      

Selling, general and administrative               

    134,615     2,520                                    

Intangible amortization

    64,367               (g )                      

Non-cash changes in fair value of estimated contingent consideration

    22,294                                        

Depreciation and other amortization

    6,686     115                                    

Total operating expenses

    657,134     23,234                                    

INCOME FROM OPERATIONS

    5,753     1,488                                    

OTHER INCOME (EXPENSE):

                                               

Interest income

    222                                        

Interest expense

    (41,861 )   (363 )         (h )             (b)        

Amortization of debt financing costs

    (4,084 )                                      

Loss on extinguishment of borrowings

    (8,106 )                             (b)        

Other (expense) income—net

    (3,191 )   4                                    

Income from equity method investments

    1,407                                        

Total other expense—net

    (55,613 )   (359 )                                  

INCOME(LOSS) BEFORE INCOME TAX

    (49,860 )   1,129                                    

INCOME TAX EXPENSE (BENEFIT)

    (1,501 )             (i )             (c)        

Less: net loss attributable to non-controlling interests

        (66 )         (j )             (d)        

NET INCOME (LOSS) ATTRIBUTABLE TO FOCUS FINANCIAL PARTNERS INC. 

  $ (48,359 ) $ 1,063                     $                    $               

Net loss per share of Class A common stock:

                                               

Basic

                                      (e)   $               

Diluted

                                      (e)   $               

Weighted average shares of Class A common stock outstanding:

                                               

Basic

                                      (e)        

Diluted

                                      (e)        

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Notes to the Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 2017
(dollars in thousands, except per share data)

        (a)   Reflects additional compensation expense related to the vesting of certain incentive units occurring in connection with the reorganization transactions and additional compensation expense related to cash payments and the issuance of stock options to unitholders in connection with this offering and the related deferred tax impact.

        (b)   Reflects reduction of interest expense and loss on extinguishment of borrowings related to the reduction of indebtedness under our credit facilities at an assumed interest rate of        %. Each 1.00% change in the assumed interest rate for such indebtedness would increase or decrease pro forma interest expense by approximately $           million for the year ended December 31, 2017.

        (c)   Reflects the impact of U.S. federal, state, local and foreign income taxes on the income of Focus. The pro forma effective income tax rate is estimated to be approximately        % and was determined by combining the projected U.S. federal, state, local and foreign income taxes.

        As a flow-through entity, Focus LLC is generally not and has not been subject to U.S. federal and certain state income taxes at the entity level, although it has been subject to the New York City Unincorporated Business Tax. Instead, for U.S. federal and certain state income tax purposes, taxable income was and is passed through to its unitholders, which after the reorganization transactions, will include Focus. Focus is subject to U.S. federal and certain state income taxes applicable to corporations. The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. federal income tax statutory rate to loss before provision for income taxes as follows:

 
  For the Year
Ended December 31, 2017
 
 
  (dollars in thousands)
 

U.S. federal statutory rate

  $                                       %

State and local income taxes, net of U.S. federal

                           %

Permanent items and other

                           %

Rate benefit from the flow through entity(1)

                           %

Provision for income taxes

  $                                       %

(1)
Rate benefit from the flow through entity is calculated principally by multiplying the consolidated pro forma income before tax by the percentage of non-controlling interests (        %) represented by the common units and incentive units, after taking into account the hurdle, of Focus LLC held by the continuing owners and the U.S. federal statutory rate. The pro forma income before tax attributable to the non-controlling interests would be subject to New York City Unincorporated Business tax at the consolidated level at a statutory rate of 4.0%. The U.S. federal and state income taxes on the earnings attributable to the common units and incentive units held by the continuing owners will be payable directly by the continuing owners.

        The table above includes certain book to tax differences such as non-deductible meals and entertainment, non-cash equity compensation expense, and intangible acquisition expenses which represent permanent differences. These differences are recognized at the level of the flow through entity, Focus LLC, and indirectly impact Focus by increasing the effective income tax rate.

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        (d)   Represents the non-controlling interest allocation of        % of the net loss of Focus to the continuing owners. The percentage is based on the common units and incentive units of Focus LLC to be outstanding after the offering.

 
  For the Year Ended
December 31, 2017
 
 
  (dollars in thousands)
 

Vested common units held by continuing owners

       

Common unit equivalents of vested incentive units held by continuing owners(1)

       

Total common units and common unit equivalents attributable to non-controlling interest

       

Total vested common units and vested common unit equivalents of incentive units outstanding

       

Non-controlling interest allocation

                         %

Loss before provision for income taxes

  $                       

Non-controlling interest allocation

                         %

Loss before provision for income taxes attributable to non-controlling interest

       

Non-controlling portion of provision for income taxes(2)

       

Net loss attributable to non-controlling interests

  $                       

(1)
On a common unit equivalent basis using the initial public offering price.

(2)
The non-controlling portion of provision for income taxes of $            for the year ended December 31, 2017, is calculated by multiplying the pro forma provision for income taxes for Focus LLC of $            by the non-controlling interest allocation percentage of        %.

        (e)   The pro forma basic and diluted net loss per share of Class A common stock is calculated as follows:

 
  Basic   Diluted  
 
  (dollars in thousands,
except per share data)

 

Pro forma net loss attributable to Focus(1)

  $                $               

Weighted average shares of Class A common stock outstanding(1)(2)(3)

             

Pro forma net loss per share of Class A common stock

  $                $               

(1)
Shares of Class B common stock do not share in the earnings of Focus and are therefore not included in the weighted average shares outstanding or net loss per share. Furthermore, no pro forma effect was given to the future potential exchanges of the            vested common units and            vested incentive units held by the continuing owners that will be outstanding immediately after the consummation of the reorganization and the offering for a corresponding number of shares of our Class A common stock because the issuance of shares of Class A common stock upon these exchanges would not be dilutive.

(2)
Compensatory and non-compensatory stock options issued in connection with the reorganization transactions and this offering are anti-dilutive and are therefore not included in the weighted average shares.

(3)
Diluted net loss per share includes            shares related to unvested Class A common stock.

        (f)    To record management fees pursuant to the management agreement entered into with the selling principals of SCS Financial Services, LLC and reduce the principals' historical compensation.

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        (g)   To record additional amortization expense related to the SCS Financial Services, LLC intangibles acquired in connection with the SCS Acquisition.

        (h)   To record adjustments to interest expense due to increased borrowings of $213,000 as a result of the SCS Acquisition at an assumed interest rate of        % and eliminate SCS Financial Services, LLC's interest expense, as the outstanding debt of SCS Financial Services, LLC was repaid at the closing of the SCS acquisition. Each 1.00% change in the assumed interest rate for such indebtedness would increase or decrease pro forma interest expense by approximately $           million for the year ended December 31, 2017.

        (i)    To record additional tax expense resulting from the SCS Acquisition.

        (j)    To eliminate SCS Financial Services, LLC's non-controlling interest as Focus LLC is the sole equity owner post-acquisition.

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Unaudited Pro Forma Consolidated Balance Sheet
as of March 31, 2018
(dollars in thousands, except per share data)

 
  Focus Financial
Partners, LLC
Historical
  Pro Forma
Adjustments
  Pro Forma
Adjustments
Note
  Focus Financial
Partners Inc.
Pro Forma
 

ASSETS

                       

Cash and cash equivalents

  $ 27,949   $     (a)(b)(c)(e)(f)(g)   $    

Accounts receivable—net

    84,433                  

Prepaid expenses and other assets

    47,858         (c)        

Fixed assets—net

    21,870                  

Debt financing costs—net

    12,541                  

Deferred tax asset

              (a)(d)        

Goodwill

    527,201                  

Other intangible assets—net

    532,667                  

TOTAL ASSETS

  $ 1,254,519   $         $    

LIABILITIES, MEZZANINE EQUITY, AND MEMBERS' DEFICIT/SHAREHOLDER'S EQUITY:

                       

LIABILITIES:

                       

Accounts payable

  $ 7,201   $     (c)   $    

Accrued expenses

    28,837         (c)        

Due to affiliates

    23,735                  

Deferred revenue

    7,986                  

Other liabilities

    110,455                  

Borrowings under credit facilities

    992,185         (g)        

Tax receivable agreement obligations

              (d)        

TOTAL LIABILITIES

    1,170,399                  

MEZZANINE EQUITY:

                       

Redeemable common and incentive units

    166,249         (f)(g)(j)        

Convertible preferred units

    698,500         (f)(g)(j)        

Total mezzanine equity

    864,749                  

MEMBERS' DEFICIT

    (780,629 )       (a)(b)(e)(g)(j)        

Class A Common stock, par value $0.01,                 shares authorized; and                 shares issued and outstanding, as adjusted

              (c)(f)(g)(j)        

Class B Common stock, par value $0.01,                 shares authorized; and                 shares issued and outstanding, as adjusted

              (g)(j)        

Additional paid-in capital

              (a)(c)(d)(f)(g)        

Shareholder's equity

              (a)(c)(f)(g)        

Total members' deficit / shareholder's equity

    (780,629 )                

Non-controlling interests

              (h)        

TOTAL LIABILITIES, MEZZANINE EQUITY, AND MEMBERS' DEFICIT/SHAREHOLDER'S EQUITY

  $ 1,254,519   $         $    

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Unaudited Pro Forma Consolidated Statement of Operations
for the Three Months Ended March 31, 2018
(dollars in thousands, except per share data)

 
  Focus Financial
Partners, LLC
Historical
  Pro Forma
Adjustments
  Pro Forma
Adjustments
Note
  Focus Financial
Partners Inc.
Pro Forma
 

REVENUES:

                       

Wealth management fees

  $ 184,323   $         $    

Other

    11,906                  

Total revenues

    196,229                  

OPERATING EXPENSES:

                       

Compensation and related expenses

    73,349         (a)        

Management fees

    46,300                  

Selling, general and administrative

    36,287                  

Intangible amortization

    19,494                  

Non-cash changes in fair value of estimated contingent consideration

    6,371                  

Depreciation and other amortization

    1,882                  

Total operating expenses

    183,683                  

INCOME FROM OPERATIONS

    12,546                  

OTHER INCOME (EXPENSE):

                       

Interest income

    142                  

Interest expense

    (14,272 )       (b)        

Amortization of debt financing costs

    (959 )                

Gain on sale of investment

    5,509                  

Loss on extinguishment of borrowings

    (14,011 )       (b)        

Other (expense) income—net

    93                  

Income from equity investments

    74                  

Total other expense—net

    (23,424 )                

INCOME (LOSS) BEFORE INCOME TAX

    (10,878 )                

INCOME TAX EXPENSE (BENEFIT)

    1,176         (e)        

Less: net loss attributable to non-controlling interests

            (h)        

NET INCOME (LOSS) ATTRIBUTABLE TO FOCUS FINANCIAL PARTNERS INC.

  $ (12,054 ) $         $    

Net loss per share of Class A common stock:

                       

Basic

              (i)   $    

Diluted

              (i)   $    

Weighted average shares of Class A common stock outstanding:

                       

Basic

              (i)   $    

Diluted

              (i)   $    

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Notes to the Unaudited Pro Forma Consolidated Balance Sheet and Statement of Operations
as of and for the Three Months Ended March 31, 2018

        (a)   Reflects additional compensation expense related to the vesting of certain incentive units occurring in connection with the reorganization transactions and additional compensation expense related to cash payments and the issuance of stock options to unitholders in connection with this offering and the related deferred tax impact.

        (b)   Reflects reduction of interest expense and loss on extinguishment of borrowings related to the reduction of indebtedness under our credit facilities at an assumed interest rate of      %. Each 1.00% change in the assumed interest rate for such indebtedness would increase or decrease pro forma interest expense by approximately $          million for the three months ended March 31, 2018.

        (c)   From this offering, Focus expects to receive net proceeds from the sale of Class A common stock, par value $0.01 per share, of approximately $            , representing the gross proceeds of $            less the underwriting discount of $            and estimated offering expenses payable by us of $            , of which $875,000 have been previously incurred and that Focus has deferred and included in prepaid expenses and other assets on the unaudited pro forma consolidated balance sheet. The gross proceeds are based on the initial public offering price of $            per share (the midpoint in the price range set forth on the cover of this prospectus).

        The offering adjustments to additional paid-in capital are determined as follows (in thousands):

Gross proceeds from offering

  $    

Underwriting discount

       

Estimated offering expenses

       

Par value of Class A common stock

       

  $